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Saipem CEO says capacity hampers projects

19 October 2023

Italian oil and gas contractor Saipem had to turn down projects due to lack of capacity after shrinking its headcount by more than a third, the company's CEO Alessandro Puliti said at the Energy Intelligence Forum in London.

In 2014, the engineering, procurement and construction (EPC) contracting company had a headcount of 50,000, which currently stands at 32,000, Puliti said.

“That is the situation and it is also a good proxy of our capacity to deliver.” 

He added: “I had to say to one of our top clients that we could not participate in a tender that he was offering to us because, simply, we do not have the capacity in the next three years to take on such a job on top of the ones that we already have under construction.

“That is the situation. Capacity is a problem.”

He added: “All oil and gas producers want to see their gas reserves developed between now and 2030 and, all of the solutions for decarbonisation, again they want them to be executed before 2030.”

Puliti said that contractors are currently under “enormous pressure” due to several factors, including higher interest rates and increased demand by clients for fast-track projects.

Major Saipem contracts

Saipem has won several significant contracts in the Middle East and North Africa region in recent months.

Earlier this month, Abu Dhabi National Oil Company (Adnoc) awarded a consortium of Abu Dhabi’s National Petroleum Construction Company and Saipem the offshore EPC package for its Hail and Ghasha offshore sour gas field development project.

The total value of the Hail and Ghasha offshore contract is $8.2bn, with Saipem's share being $4.1bn. The scope of work broadly involves EPC of offshore facilities, including facilities on artificial islands and subsea pipelines.

In August, Saipem was awarded a new contract, worth approximately $1bn, by Libya-based Mellitah Oil & Gas as part of the Bouri Gas Utilisation Project.

Mellitah Oil & Gas is a consortium formed by Libya’s state-owned National Oil Corporation and the Italian oil and gas company Eni.

Under the terms of the contract, Saipem will revamp the platforms and other facilities located at the Bouri gas field, which lies in water depths of between 145 metres and 183 metres off the coast of Libya.

Saipem said the contract scope covers the engineering, procurement, construction, installation and commissioning of an approximately 5,000-tonne gas recovery module on the existing DP4 offshore platform.

It also covers the laying of 28 kilometres of pipelines connecting the DP3, DP4 and Sabratha platforms.

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Wil Crisp

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