French oil services giant Technip’s UK business has warned 2017 will be “the most difficult year” despite expecting North Sea projects to come back on the market.
Technip UK, based largely in Westhill, Aberdeenshire, said the “expectation of a low oil price for longer continues to persist”, according to a strategic report in its latest set of accounts posted at Companies House.
The report, which was dated just a few weeks ago at 2 September, said the firm has “seen, and expects to see, additional delays on new projects” as its clients cut their budgets.
But Bill Morrice, Technip UK’s managing director who signed the report, said he expects to see an “improvement on the order intake side as more projects come back to the market on a higher oil price and reduced cost base”. He added that clients are still spending their cash on “strategic projects”.
Some of the biggest North Sea jobs the firm has been working on in recent years included BP’s £800million Quad 204 project West of Shetland.
In May, Technip and US rival FMC Technologies struck a £9billion “mega-merger” which the firms said is expected to deliver savings of more than £400million. Technip UK said in the accounts it did “not anticipate that this proposed transaction will have a significant effect” on its UK business.
Mr Morrice added that its pre-merger alliance with FMC, dubbed Forsys, has been “well received by clients” as they required greater “standardisation and simplification” of projects.
He said that the UK group was “redefining cost culture”, and getting involved in efficiency initiatives led by trade body Oil and Gas UK as well as its own internal programmes. The company is also targeting the Mediterranean as a region where it expects to pick up “several projects” this year, and added decommissioning will become a “key strategic pillar” for the firm over the next five to 10 years.
In July last year, the Paris-based group launched plans to cut 6,000 jobs from its global workforce.
The UK firm it had to make some “difficult decisions” last year and that its workforce – contractors and staff – was reduced. According to the accounts, employed staff number remained broadly flat at 1,022 at the end of the year compared to 1,012 in 2014. The company was thought to have employed 1,200 at its peak.
According to the accounts, Technip UK’s top paid director saw his pay packet rise to £540,000 from £465,000 in 2014. The firm also chipped £28,000 into his pension scheme albeit this was reduced from £42,000 the prior year.
Technip revealed that its turnover rose 9% to £1.3billion in 2015, while pre-tax profits rose sharply – up 37% to £89million.
Recommended for you
