Subsea sector rises on the back of deepwater success


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Submitted by Paddy Harris on 24th October 2014

24th October 2014

Deepwater production growth has seen a major subsea equipment manufacturer and a global service provider both post record profits in their subsea sections for the third quarter of the year

Subsea sector rises on the back of deepwater success

The backlog for subsea surfaces is getting larger as more deepwater projects come online off Brazil, West Africa and Asia

FMC Technologies’ subsea division has seen USD 1.7bn of inbound orders in the third quarter, whilst EMAS AMC (the subsea division of Ezra) has seen revenue increase 32 per cent to USD 1bn dollars.

EMAS AMC just today announced an additional USD 70m-worth of SURF contracts across the Asia Pacific and Gulf of Mexico regions.

“We have achieved healthy revenue growth of 23 per cent CAGR [compound average growth rate] over the last three years, driven by strong performance of EMAS AMC,” said Lionel Lee, Ezra’s Group CEO and managing director.

“With Lewek Constellation turning fully operational in the first quarter of 2015, we remain optimistic and confident that she will be helming the group’s future, and we will be able to achieve our desired levels of economies of scale in the next three to five years by driving operational efficiency to optimise profitability.”

Growth in operational demand also appears to have boosted technology sales with FMC Technologies posting an accrued subsea income of USD 5.9bn over the year so far.

“Quarterly subsea margins are at the highest level we have delivered in over four years," said John Gremp, chairman, president and CEO of FMC Technologies. "Our focus on execution, the strength of our backlog, and the growth of our subsea service revenue has positioned us to continue delivering mid-teen level margins."

FMC’s subsea technologies third quarter revenue was USD 1.3 billion, up 16 per cent from the prior-year quarter.

Industry analysts have commented that an explosion of interest in Mexico’s offshore sector, the reinvigoration of Brazil’s deepwater and the massive push to boost revenue in the Asia Pacific have all added to the growth of the subsea equipment and services sector.