Saipem in light after new contract in Nigeria for around $900m, analysts positive

(Il Sole 24 Ore Radiocor) - In a day of declines for Piazza Affari with the FTSE MIB almost all in the "red", the only noteworthy rise is that of Saipem, which has been awarded, in consortium with Koa Oil & Gas and Aveon Offshore, a major offshore contract from Shell in Nigeria, with Saipem's share worth around USD 900 million (the total value of the contract is around USD 1 billion). The contract, as Saipem points out, "contributes to the overall commitment of the fleet until 2027" and "confirms Saipem's leading role in deepwater activities, particularly in West Africa and Nigeria, where Saipem has been present since the late 1960s".

According to analysts, the news has positive implications for estimates for the fiscal years 2026-2027: "2024 offshore E&C order intake rises to almost €14bn. According to Saipem, the utilisation of the offshore E&C fleet is at full capacity in 2025-2026 while on 2027-2028 it had a good level of utilisation. We estimate that the contract has a marginality above the division's average (currently 12%)," Equita's experts explained. In more detail, the group was awarded an offshore contract by Shell Nigeria Exploration and Production Company Limited (SNEPCo) for the Bonga North project, relating to the development of a deepwater oil field, 130 km off the coast of Nigeria. The project concerns the connection of wells to the existing Fpso. Saipem will be responsible for the engineering, procurement, construction and installation (Epci) of risers and flowlines, subsea umbilicals and associated subsea structures. Design and fabrication activities will be carried out locally, including with the involvement of Nigerian suppliers and subcontractors.

The agreement "contributes to the overall fleet commitment until 2027 and confirms Saipem's leading role in deepwater activities, particularly in West Africa and Nigeria. It is a positive news that confirms the strong business momentum in the Offshore segment", explain Intermonte's analysts, who confirm the positive view on the stock and remind that "with this contract the order intake since the beginning of the year should be around 18 billion euros, of which 2 billion in the first quarter, 5.1 billion in the second, 6.4 in the third and 4.5 billion in the fourth to date. For 2024 our intake was 17.2 billion, which has now been exceeded'.