Supplier emerged in October after joint venture between SLB, Aker and Subsea

04/01/2024

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Mads Hjelmeland — Foto: Leo Pinheiro/Valor

Subsea technology and equipment supplier OneSubsea expects Brazil to rise to 25% of its global turnover from the current 20% in three years. The company, which does not reveal its annual revenue, was created in October as the result of a joint venture between SLB (70%), Aker Solutions (20%) and Subsea7 (10%), and has headquarters in Oslo, Norway, and Houston, Texas. The estimated synergy potential of the new business is more than $100 million per year in the medium term.

On his first visit to Brazil as the company’s CEO, Mads Hjelmeland told Valor that the country is of strategic importance to OneSubsea.

Before taking over the new company, Mr. Hjelmeland was the head of subsea production systems at SLB. OneSubsea has 11,000 employees in 16 countries, 3,200 of them in Brazil, where the company has production units in São José dos Pinhais (Paraná state) and Taubaté (São Paulo) and service units in Rio das Ostras and Macaé (Rio de Janeiro).

Mr. Hjelmeland said that production in Brazil is important because of the importance of the oil and gas market, which leads OneSubsea to acquire the knowledge to develop solutions here for other countries: “We develop new capabilities here that don’t just stay in the Brazilian market. We acquire knowledge here and export it to the rest of the world.”

He cited as an example the production of a piece of equipment used to monitor and control the production of a subsea well, known as a wet Christmas tree, produced at the company’s Brazilian facilities and which will be used in a Chevron project in the Gulf of Mexico.

The installation is scheduled for April this year and represents a significant milestone for the industry, said Mr. Hjelmeland. The company produces Christmas trees in Brazil and exports them to countries in the Gulf of Mexico and the North Sea. Around 800 Christmas trees produced by OneSubsea and Aker have already been delivered to Petrobras for use in the pre-salt fields.

Among the motivations on the company’s horizon is the development of new oil frontiers, such as the Equatorial Margin, in Brazil, and West Africa. In the case of the Brazilian region, Mr. Hjelmeland has good prospects: “The Equatorial Margin is an exciting prospect. It’s one of the areas in which we’re interested in collaborating in partnership with Petrobras. We’ve been looking at how to increase the level of investment in people to meet these needs for new fronts and new energies.” By “new energies”, Mr. Hjelmeland is referring to wind power generation, both onshore and offshore. “It’s still early days, but it’s a market we’re very interested in. We’re hopeful, but the energy transition is complex.”

Mr. Hjelmeland says that the company is committed to positioning itself in Brazil to support oil companies in the current boom cycle in the oil and gas sector, while also looking at other markets: “We are excited about the Brazilian market in 2024 and, after that, it is a place where we will continue to increase our activities. We are positioning ourselves to be able to support the expectations of projects in Brazil, collaborating in prospecting with Petrobras and other players. It’s one of the most attractive markets in our portfolio.”

As for the market in Africa, Mr. Hjelmeland said there are clear indications that activity there is recovering: “The west of the African continent has historically been active, but there was a recent slowdown, which affected each of the countries in different ways, and now we see activity returning.”

OneSubsea’s expectations are confirmed by market projections. According to Citi, countries that are not part of the production agreements of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are expected to stand out in terms of increased oil production in 2024 and 2025. According to the bank, in a March 17th report, Brazil’s oil production is expected to increase by around 400,000 barrels per day in 2024 and around 200,000 in 2025 with the boost from the pre-salt fields.

Mr. Hjelmeland cites the difficulties in the oil and gas supply chain as a warning sign. Petrobras itself, for example, has mentioned on several occasions the difficulty of contracting Floating Production, Storage, and Offloading (FPSO) units due to the boom cycle, which has increased demand from oil companies.

“There are typical challenges that arise in times of a boom cycle in the world’s oil and gas sector, such as the supply chain,” said Mr. Hjelmeland. “Right now, especially, the FPSO manufacturing market is struggling to meet demand. But we need to keep in mind that we are still living through the consequences of the pandemic, which has impacted the industry and people in general, as well as other global geopolitical issues that also affect the sector and the transportation of goods, imposing challenges in the execution of projects.”

*Por Kariny Leal — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/