Tyneside offshore specialist TechnipFMC seals deal…

Tyneside offshore specialist TechnipFMC seals deal worth more than £60m

Subsea offshore specialist TechnipFMC has won a ‘significant’ contract worth more than £60m which will support work at its Tyneside yard.

TechnipFMC, which has bases in Walker, Newcastle, and Houston, US, announced it has been awarded an engineering, procurement, construction and installation contract by Shell for the Jackdaw development. The Jackdaw field, based around 250km off the coast of Aberdeen, Scotland, sits next to the UK/Norway median line in the North Sea.

The contract covers pipelay for a 30km tieback from the new Jackdaw platform to Shell’s Shearwater platform, as well as subsea structures, umbilicals and other vital equipment. The deal value has not been disclosed, but TechnipFM said that a significant contract for the company is between $75m and $250m (£67.1m to £223.6m).

Jonathan Landes, president of subsea at TechnipFMC, said: “We’re excited to embark on this significant project together in the UK North Sea. Our strong technical record and our ability to design, engineer, construct and install were key to our success in winning this award.”

It marks the second recent large value deal for the Wallsend business, which manufactures and sells hydraulic and electro-hydraulic control and chemical injection umbilicals for the subsea offshore oil and gas industry.

In May, it won a contract from offshore energy firm Equinor for the Halten East development on the Norwegian continental shelf. Equinor said the contract was worth between 1.3bn and 1.5bn Norwegian krone (£108m-£125m).

The deal comes as TechnipFMC Umblicals publishes accounts for 2021, showing a big lift in profits, despite seeing revenues drop. The company employs more than 300 people on Tyneside, which is also the main centre of expertise for research and development, engineering, project management and manufacturing of umbilical systems in the TechnipFMC group.

Accounts show that revenues dropped from £222.9m to £92.7m, but Ebitda grew significantly from £35m to £54.9m. Operating profit similarly increased, from £28.7m to 48.9m Profit for the year came in at £40.7m, more than double the previous year’s £18.03m.

The company said order intake has increased by 53% from 2020, reflecting a rebound in the market, but that revenue decreased by 58% due to lack of large projects and support projects from the Angolan and US umbilical companies within the group.

The directors highlighted how the future looked promising in the accounts, adding: “The outlook for crude oil and gas has improved and the long-term demand for energy is forecast to rise significantly. Regardless of the oil price level, clients continue to emphasise their need to reduce costs throughout the supply chain and to improve the viability of their existing projects and future developments. More than ever, clients will need close relationships and early interaction with suppliers able to offer optimisation of design, cost reduction and competitive new technologies.”