Saipem consolidates portfolio, 3.7 billion order in Angola

Saipem's order intake for 2024 accelerates as the company announces the award of three new contracts from TotalEnergies Ep Angola Block 20 subsidiary TotalEnergies for a total of $3.7 billion. This is more than the group's order intake to date, which rises to $6.4 billion, bringing it closer to its plan target of $11.6 billion by year-end. The deal, which follows a recent announcement of an $850 million contract with Azule Energy, also in Angola, concerns the Kaminho project for the development of the Cameia and Golfinho oil fields, located about 100 km off the coast of the African state. These are, as mentioned, three contracts. The first contract covers the engineering, procurement, construction, transportation and commissioning of the Fpso Kaminho (Floating production storage and offloading) vessel. The second contract includes the operation maintenance (O&M) of the same Fpso vessel for a period of 12 years with a potential extension of 8 years, leveraging the experience gained with three other Fpso vessels currently operating in Angola. The third contract involves the engineering, procurement, construction, installation, pre-commissioning and start-up support of a Surf (Subsea umbilicals, risers flowlines) package, which includes approximately 30 km of 8" and 10" pipelines and risers and umbilicals.

The associated structures will be fabricated at Saipem's local plant in Ambriz. For the offshore campaign, and specifically for the J-lay vessel, Saipem will use its own Fds vessel and will extensively involve the local supply chain for logistics and fabrication activities. The joint award of the Surf, Fpso and O&M contracts confirms, Saipem explained in a note, the competitiveness of Saipem's integrated business model, in particular "its unique ability to provide engineering and project management services in the offshore and plant engineering fields, coupled with a fleet of state-of-the-art vessels and an on-site fabrication capability".

Piazza Affari reacted positively to the news, with the stock jumping immediately above €2.3 per share, to its highest level since the beginning of the year, after the recent boost following the presentation of the quarterly report. Equita, which has a hold rating on the stock with a €2 euro target price, says the news "is positive as the contract represents around 50 per cent of the estimated order intake for 2024 for the offshore E&C (Asset Based Services division), or 30 per cent of total group order intake for the year". Equita calculates that the order intake announced since the beginning of the year is around EUR 6.4 billion, compared to 'order intake estimates for 2024 of EUR 11.6 billion, but with a more favourable mix. We estimate,' says Equita, 'that the project can have a double-digit percentage marginality in line with, if not higher than, the Abs division average'. Intermonte analysts also point out that the news is "very positive and confirms the strong order momentum in the Offshore segment. The joint award of the Surf, Fpso and O&M contracts confirms the competitiveness of Saipem's integrated business model," they point out. Intermonte, which has a buy rating with a €3 euro target price on the stock, also calculates that with these contracts, order intake since the start of the year should have reached around €6.2bn. "For 2024," the analysts say, "our order intake estimate is €13.4bn. The contracts that Saipem was awarded by TotalEnergies are for the Kaminho project and concern the Fpso vessel, its operation maintenance (O&M) and Surf operations.