McDermott sees high growth in offshore oil projects

McDermott sees high growth in offshore oil projects

Pent up demand following the economic crisis of 2008-2009 provides high growth opportunities for offshore oil and gas construction specialist McDermott International Inc. both in the Middle East and globally, the company's chief executive officer said.

October 15, 2011 4:10 by Reuters

“I would say that the opportunities for growth in the next 3 to 5 years are significantly high for McDermott and the offshore industry,” Stephen Johnson said in an interview when opening the company’s new engineering office in Khobar with Saudi partner Khalid al-Shoaibi.

“The economic crisis of 2008-2009…developed some pent up demand for projects. So we see in this region as well as other parts of the world opportunities,” Johnson said.

Until the end of the year, the growth outlook was steady, he said and added that he expected the company to make about $3.5 billion in revenues this year.

“We expect to bring new work in to allow us to sustain that level and hopefully grow it but that is all dependent on what we are able to win.”

Johnson said some of the easier hydrocarbon discoveries have already been made. “The more difficult seem to be moving offshore in the Middle East and other parts of the world.”

He added that opportunities in Saudi Arabia and the Gulf in particular are in shallow water.

The US-based company is building offshore platforms and a subsea pipeline in Saudi Aramco’s first non-associated gas field Karan, from where the pipeline will carry the sour gas for processing at Khursaniyah plant onshore.

Works on Karan field by the company is due to be completed in the first quarter of 2012, Johnson said.

He declined to say which projects the company would be bidding for in the future, but said opportunities with Aramco, Khafji Joint Operations (KJO) and the United Arab Emirates were robust.

Competition for engineering works had been fierce, particularly from South Korean firms, which won from Aramco $11.5 billion worth of contracts in the last five years, Aramco’s Chief Executive, Khalid al-Falih said.

“For sure we have come up against them in the Middle east, both for Saudi Arabian projects and we will likely come across them in the UAE,” Johnson said. (By Reem Shamseddine; Editing by Humeyra Pamuk)