Saipem close to Nigeria jv deal after China success – source




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By Stephen Jewkes and Giancarlo Navach

MILAN Italy’s Saipem is close to signing a joint ventureNigeria with a big local partner Nigeria just days after clinching a similar in with PetroChina as the oil contractor seeks access to new markets.

Saipem, 43 percent owned by Italian oil major Eni, has seen some 10 billion euros ($11 billion) wiped off its market value over the past two years after two profit warnings, a corruption investigation in Algeria and a worsening outlook.

“The group is finalising the creation of a joint venture with a very important Nigerian partner to help it develop its business in the country,” a source close to the matter said.

Tumbling oil prices and rising costs have prompted oil majors worldwide to cut spending, prompting contract cancellations that have hurt contractors.
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“The company is seeking to leverage its E&C (Engineering & Construction) competences and its vessel fleet to enter into new markets or grow its presence in existing markets with leading local operators,” the source said.

Saipem, which has been fined in a case relating to alleged corruption in Nigeria, already has a presence in the country, including the subsea development of the Egina Field with France’s Total

The source said the Nigeria deal follows hard on the heels of a landmark joint venture signed with the PetroChina group last week.

 

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The deal will create a new company well placed to build a strong in the growing Chinese oil service sector, with a specific focus on turn-key projects likes LNG terminals, pipelines, and storage units.

“In a few months the joint venture will have the license to operate,” the source said.

People’s Bank of China owns around 2 percent of Saipem. ($1 = 0.9069 euros) (Reporting by Stephen Jewkes and Giancarlo Navach, additional reporting by Aizhu Chen; editing by Silvia Aloisi and Keith Weir)(Reuters)