SBM Offshore, a Dutch provider of floaters for the offshore oil and gas industry, has reported a fall in its directional revenue.
In its third quarter 2015 update, the company said that year-to-date directional revenue came in lower at $2.1 billion versus $2.5 billion in the year-ago period.
This was driven by a decrease in turnkey activity primarily as a result of the delivery of Cidade de Ilhabela and N’Goma FPSO in 2014, lower activity on remaining projects under construction, and reduced order intake in 2015, partially offset by the divestment of a stake in the Turritella project at the end of the second quarter of 2015.
Directional turnkey segment revenue came in at US$1.3 billion, down 29%, while Lease and Operate segment revenue increased 7% year-on-year to US$807 million.
The growth in Lease and Operate revenue is attributable to the start-up of FPSOs Cidade de Ilhabela and N’Goma FPSO despite the decommissioning of FPSOs Marlim Sul, Brasil, and Kuito, SBM Offshore said.
Bruno Chabas , CEO of SBM Offshore said: “Recent months have seen a further deterioration in our industry with continued project deferrals. SBM Offshore is confident in its ability to further adapt and adjust in this ongoing downturn. Given that background, we are pleased to have been awarded the Browse FLNG turret FEED study and we look forward to delivering strong Lease and Operate segment cash flow upon completion of the last three FPSO projects under construction.”
Providing outlook the company said the market outlook remained challenging with delays in final investment decisions, and ultimately awards, by clients.
“The Company maintains its positive medium to long-term outlook as deepwater development remains a secular growth story,” SBM Offshore said.
The world’s largest FPSO provider reiterated 2015 directional revenue guidance of at least $2.6 billion, of which $1.4 billion is expected in the turnkey segment and $1.2 billion in the Lease and Operate segment.