Eni (E) & BP Award Offshore Contracts Worth $700M in Total
Eni SPA E and BP plc BP awarded two contracts worth a total of $700 million for offshore activities in Congo and the Gulf of Mexico to Saipem SpA SAPMF.
Eni’s contract involves the conversion of the Scarabeo 5 semisubmersible drilling unit into a separation and boosting facility. The conversion will enable the drilling rig to transform into a floating production unit (FPU).
Following the conversion, Scarabeo 5 will receive production fluids from other platforms, separate the gas from liquids and boost the gas to feed the nearby floating LNG (“FLNG”) unit. Then, it will be installed offshore the Republic of Congo, 35 meters below the water surface.
The FPU is expected to start up in the fourth quarter of 2025. Eni has another FLNG unit, which is being developed to be installed offshore Congo. Once the two units are online, the total LNG production capacity in the Marine XII concession is expected to reach 3 million tons per year in 2025.
Meanwhile, BP awarded the contact to Saipem for multiple offshore activities in the Gulf of Mexico. The contract involves the Argos FPU, which is BP’s semi-submersible production platform in the U.S. Gulf of Mexico. Located in the Green Canyon Block 780, the platform has a gross production capacity of up to 140,000 oil barrels per day.
The contract will allow Saipem to use its flagship vessel, Saipem Constellation, to perform marine activities needed for the project. This will be Saipem’s first project involving the deployment of the Saipem Constellation in the Gulf of Mexico. The award demonstrates Saipem’s expertise in delivering advanced offshore solutions for the energy industry.
The latest contracts follow Saipem’s recent agreement worth $1 billion with Mellitah Oil & Gas, which involves a gas project offshore Libya. The achievements come in swift order after Saipem’s success in securing contracts worth $2 billion in Romania and Germany.
The U.S. offshore industry is witnessing early signs of revival, as evidenced by the increasing project sanctions. Another offshore drilling contractor Transocean Ltd. RIG is well-positioned to capitalize on trend effectively, given its technologically advanced and versatile drilling fleet.
Further, as the drilling fundamentals improve with the rebound in oil price, the demand for rigs is likely to improve, benefiting the offshore drilling giant. In July, Transocean announced that six one-well options have been exercised for the Transocean Encourage semi-submersible drilling rig in Norway.
The newly exercised six-well option calls for the work to begin immediately after the current firm term, which now extends through February 2026. According to Transocean, the anticipated 370 days of work will add $172 million to the backlog.
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