SCHIEDAM, the Netherlands – In its 4Q 2015 report, SBM Offshore said that it did not see signs of a market recovery before 2018 and had taken measures to streamline its presence and workforce.
The company said that it reduced its workforce by around 3,200 positions during 2015, with around 1,500 being full-time employees and contractor staff. The remaining 1,700 were construction yard positions related to the winding down of projects under construction. Restructuring costs totaled $55 million over 2015.
It expects to eliminate another 400 positions in 2016 due to the prolonged downturn, at a cost of $30 million. This additional action is expected to generate a further $40 million of annualized cost savings.
Overall restructuring costs of $63 million are expected to generate annualized savings of around another $80 million.
The company said it will maintain an engineering overcapacity to position itself for a future market upturn. This leads to cumulative directional turnkey EBIT losses of approximately $150 million over 2016 and 2017. It noted that if the downturn persisted, additional steps will be considered to manage the its cost base.
The Dutch floating production provider also gave a general project update.
The FPSO Cidade de Maricá topsides integration work at the joint venture Brasa yard outside of Rio de Janeiro, Brazil, has been completed. The vessel sailed away from the Brasa yard on Dec. 19, 2015 and is on location undergoing first oil readiness acceptance testing. The charter contract includes an initial period of 20 years. Delivery of the vessel to Petrobras is scheduled for 1Q 2016.
Construction is ongoing for the finance leased vessel FPSO Cidade de Saquarema. It has been undergoing topsides module integration at the joint venture Brasa yard outside of Rio de Janeiro since Dec. 20, 2015. The charter contract for the vessel includes an initial period of 20 years. Delivery to Petrobras is scheduled for mid-2016.
Construction was completed on the finance leased vessel FPSO Turritella at the yard in Singapore. The vessel has arrived on location in the US Gulf of Mexico. Start-up of the facility is expected in mid-2016. The charter contract includes an initial period of 10 years with extension options up to a total of 20 years.
Decommissioning activities have commenced on FPSO Marlim Sul and are expected to be completed in the following months. Following completion, the vessel will be marketed for future conversion opportunities.
The two large, complex turrets for Prelude FLNG and FPSO Ichthys were delivered to the respective yards for integration during the period. Commissioning is under way in accordance with clients’ schedules and contractual planning for both.
BP’s FPSO Glen Lyon, for which SBM delivered the Quad 204 turret, is now on location in the North Sea.
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