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Interview

Fabio Pallavicini – CEO, Saipem SA – France

The CEO of Saipem SA provides insight into the company’s history since the acquisition of Bouygues Offshore. He also discusses the importance of Saipem France to the group as a leading project execution center.

Saipem is present in France since 2002 and the complete acquisition of Bouygues Offshore the same year. Today, France is one of the Group’s Project Execution Centers. Could you please provide our audience with an overview of the importance and the role of the French subsidiary?

Saipem SA is deeply rooted in the rich tradition of the French companies which contribute to Saipem‘s success. Saipem SA stems from the acquisition of Bouygues Offshore in 2002. Bouygues Offshore was created in the 1970’s and initially focused on maritime works before becoming an important player in the offshore business.  The company’s success has drawn on the synergies between both groups. The integration of Bouygues offshore went very smoothly; we merged both cultures building on our pre-existing joint venture with Bouygues, Saibos . Through this acquisition Saipem has consolidated its position as a leader in engineering and construction.

Saipem France has since become a leading project execution center for Saipem globally. In the first decade following the acquisition, we conducted many projects in West Africa. We performed several deepwater SURF projects in Angola and Nigeria. In Angola, we for example handled the Kizomba project for ExxonMobil where we were responsible for the engineering, fabrication and installation of the subsea equipment, including umbilicals, risers and pipelines; we also worked on the Rosa project for Total.

In Nigeria, we participated in the Akpo project for Exxon, in the Usan field development for Total and also executed the contract for the subsea development of the Bonga North-West field, for Shell.

Overall we have served the oil majors on very significant SURF projects. Drawing on Bouygues Offshore’s experience, we have carried out important floaters projects, such as Erha for Exxon in Nigeria or Dalia for Total in Angola. We have therefore sustained Bouygues Offshore’s historical presence in maritime works, LNG regasification terminals and important onshore upstream projects. .

Since 2013 Saipem has been organized into four business divisions: E&C onshore, offshore, floaters and drilling. The first three are headquartered in Milan while the floaters unit is overseen from Paris.

Today, Saipem France is composed of Saipem SA and Sofresid Engineering. The two companies represent one of the most important engineering, project execution and techcnology development centre in Saipem.

What would you consider to be Saipem France’s strong suit today, between all your activites: subsea, floating production units, maritime works and more?

Saipem France boasts robust management capabilities and has filled its ranks with competent engineers covering every business segment. We are one of the very few players capable of overseeing and managing the full project development chain, starting from the conceptual stages to construction, installation and commissioning. We have the ability to work in multiple locations thanks to our business model, which coordinates efforts from all subsidiaries and business units. In order to remain efficient we rely on well performing IT systems.  

How has the introduction of a new Floaters business unit enabled Saipem France to become a key international actor on high tech projects such as floating liquefied natural gas?

The integration of the floaters business unit in 2013 has undeniably changed the scope of operations and importance of the French subsidiary. In the last two or three years, our objective has been to dispatch our onshore engineers on floaters contracts, which will concentrate higher growth levels in the future. So far the integration has been successful as we were awarded last year a large FPSO contract on behalf of Total! We also signed a contract in Indonesia for a floating production unit for gas and we developed the Front End Engineering Design on various FLNG prospects. These recent contracts now constitute the backbone of our activity. We have of course continued to develop Saipem France’s traditional business, which consists in an offshore activity in the south Atlantic region and North and West Africa.

As a strategic project execution center, what is the role of innovation and R&D in developing solutions for major deep and ultra deep-water fields?

Saipem France deals with subsea, deepwater, floaters and floating LNG projects, which require cutting edge technologies. Technological development is undeniably critical to our success and explains the importance of our Paris office as project execution center. We have established lasting relationships with French universities, research centers, laboratories and have developed partnerships with industrial partners to develop new technologies, which in turn help our clients introduce cost-effective solutions, particularly in the offshore sector. Innovation is clearly part of France’s culture. There are for example many government-incentivized programs to support technology development projects . As an execution center we provide support to every Saipem subsidiary in the world by dispatching engineers where they are most needed at any given point. We also train engineers to later dispatch them in oil producing countries where we operate. As a project center, it serves our commitment to produce local content and optimize execution schemes.

You state that Saipem France is well positioned in certain key business segments thanks to its strategic alliances with specialized partners. Could you illustrate this with a few examples?

Our floaters business has developed a strategic alliance with Chiyoda for example. Together we have developed our floating LNG activity, and have produced FEEDs s for the Abadi Floating LNG Project in Indonesia, or for Eni in Mozambique. In France, we enjoy partnerships with industrial partners such as Veolia for subsea water treatment. We are actually currently conceiving a new solution for offshore LNG offloading in partnership with Trelleborg.

We strongly believe in the growing significance of Floating LNG. While LNG is experiencing a slowdown in investments, like the whole of the oil and gas sector, I believe that if we use the proper technology LNG represents an energy for the future and a genuine market of interest for Saipem. We are participating to the main initiative occurring in this sector worldwide.

What are your main ambitions for the future?

My mandate has been to consolidate the floaters business unit and increase the competencies of the French subsidiary, notably in the offshore field. We need to continue to invest in technology development in spite of current market dynamics. We also need to maintain our activities in maritime works and onshore regasification plants.

Saipem France has adopted a management system based on a process model. This type of approach is oriented towards customer satisfaction, as well as continuous improvement and achievement in organizational results. Could you tell us more about this?

Our management method is to analyze every segment of our activity by process, starting from the tendering all the way through engineering, procurement, offshore installations to commissioning. Project management is a way of integrating each component to make a project successful.

Our clients are indeed exercising pressure on us to reduce costs. We are implementing every possible adjustment to meet their demands, but we also believe that cost-reduction should be a coordinated process a contractor with 360° competencies like Saipem can add more value to its clients if it’s involved in projects in early stages. . Current contractual arrangements are outdated and must make room for innovative cooperation approaches.

I believe that a company such as Saipem has an important role to play in the oil and gas industry regardless of hydrocarbon prices. .

Saipem SA competencies cover a wide scope of activities: offshore, onshore, floaters, etc. We are flexible, ready to adapt to stringent conditions, and always producing innovative solutions to tackle projects.

Saipem’s commitment to a strict set of HSE standards is enshrined within its philosophy. How does Saipem guarantee its customers and subcontractors the highest safety, environmental and health norms during the course of projects?

The safety and health of its people, of local communities, of its partners and subcontractors and the protection of the environment in which it operates are top priority values for Saipem. We comply with every regulation and law. Our standards and safety policies are very stringent. However, compliance does not suffice and we have thus developed and launched many internal HSE programs in recent years to improve our safety culture. We want to increase safety leadership across the hierarchy. We have also recently launched a new company program called: “we want zero” which first involved all of Saipem’s top management and then, through a cascade effect, managers and workers in a series of workshops and brainstorming sessions to answer the following question: “What extra effort to achieve zero fatalities?”. A structured process of development of the program reached its conclusion at the end of 2014, as far as identifying problems and developing actions were concerned. The first part of the 2015 has seen the implementation process get underway. The format behind the launch of We Want Zero will also be replicated at local level and will bring Saipem’s safety vision increasingly closer to becoming a reality: thousands of people united by the same passion for health and safety, with no injuries during work activities.

Click here to read more articles and interviews from France, and to download the latest free oil and gas report on the country.

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