Italian energy contractor Saipem said on Thursday it expects a 20% drop in annual orders from Saudi Arabian oil firm Aramco by 2027 as a result of the state oil company’s decision to abandon its capacity expansion plans.
Saipem, which in 2020 signed a 12-year contract with Aramco for onshore engineering and construction activities, had average annual orders of around 1.5 billion euros ($1.63 billion) from the Saudi group between 2021 and 2023 .
The Saudi Arabian government in January ordered Aramco to suspend its oil expansion plan and target a maximum sustained production capacity of 12 million barrels per day (bpd), one million bpd below the target announced in 2020.
Saipem said that after five years it would likely restart dividend payments in 2025, a sign that a restructuring plan started in 2022 was bearing fruit.
In a new business plan for 2027, Saipem said it would pay investors between 30% and 40% of its operating cash flow, triggering a 13.7% rise in its shares by 15:00 GMT, along with the tone optimistic management.
In the period 2024-27, Saipem expects to win orders worth around 50 billion euros, a third of which will be in low or zero carbon projects.
It expects to start work on a liquefied natural gas (LNG) terminal in Mozambique for France’s TotalEnergies around mid-2024, Puliti said, adding that the remaining part of the contract is worth 3.3 billion euros.
2024-02-29 23:49:52