Italy’s Saipem is looking to renewable energy sources such as wind farms to help it cope with a slump in the accounts books for oil services.
Oil contractors around the world have come under pressure as weak crude prices force even the majors to cut billions of dollars in costs and delay final investment decisions on projects.
Following the company’s first quarter results, Saipem’s chief executive Stefano Cao said: “We’re looking to grow in areas like wind farm projects, especially in the North Sea, and dismantling oil and gas platforms.”
Production cuts by OPEC have helped crude prices, but recovery for oil contractors is expected to be uneven, with those finding it tougher to cut capacity and costs lagging others with more flexible business models.
Saipem, which has both onshore and offshore drilling assets, is a market leader in subsea engineering and construction (E&C) including the world’s most expensive oil field, Kazakhstan’s Kashagan.
Cao said: “Pressure continues this year, especially in offshore E&C and few initiatives are being sanctioned… but we are on the right path.”
A slowdown in the group’s core offshore E&C business as well as in drilling led to a 20.3 percent fall in revenues to 2.3 billion euros ($2.5 billion) in the period.
Saipem shares were up 1.9 percent, while the European oil and gas sector was down 0.5 percent.
Some analysts have said Saipem will need to streamline its business and sell off assets to help fund development.
But Cao denied a break up was being considered, adding: “No way whatsoever. I’m not here to break up the company.”
However he added the group could consider joining forces with others to help improve its onshore drilling performance.
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