FMC falls in 3Q, expands JIP

Oct 21, 2015

Although Houston-based FMC Technologies fell 22% in its 3Q 2015 revenue, the company managed to book US$1 billion in subsea orders, and added US supermajor Chevron to its 20k JIP.

FMC ROV. Image from FMC Twitter.

Total revenue dropped from nearly $1.98 billion to $1.5 billion year-over-year due to severe impacts to FMC’s Surface Technologies segment, and the negative impact of the strengthening US dollar in its Subsea Technologies segment, FMC said in its report.

"Our Subsea Technologies segment delivered strong operating performance in 3Q and we received two major awards resulting in another quarter of more than $1.0 billion in orders," John Gremp, FMC chairman and CEO said. "We achieved several critical milestones this quarter, not only for our company, but for the industry. We reached an agreement with Shell to provide our first subsea multiphase pump. We added Chevron as the fifth operator in our joint industry program for standardizing high pressure/high temperature (HPHT) subsea systems. And, Forsys Subsea, our joint venture with Technip, received two integrated front-end engineering studies. These are tangible examples of how the industry is adopting standardization, innovative technology, and new business models to improve deepwater project economics."

A 16% decrease year-over-year was reported in FMC’s Subsea Technologies segment at $1.1 billion. Operating profit also dropped 16% to to $170.7 million, primarily due to $14.6 million of business restructuring costs.

FMC’s backlog stands at $5.0 billion in 3Q, which includes Subsea Technologies backlog of $4.3 billion.

In its Surface Technologies, 3Q revenue was $361 million, down 35% compared to 3Q 2014 due to much lower activity levels in the North American market.

An operating loss of $22.5 million was reported in the period, in addition to a drop of 66% in operating profit when compared to 3Q 2014.

Major-packed JIP expands

FMC is expanding in its joint industry program for standardizing systems by adding Chevron to its already high profile-backed project that includes several oil and gas majors including Anadarko Petroleum, BP, ConocoPhillips, and Shell.

The JIP, created in 2014, will focus on meeting challenges of producing oil and gas from deepwater reservoirs with pressures of up to 20,000psi and temperatures of 350°F at the mudline.

In July 2015, Chevron entered into an agreement with OneSubsea to form the 20Ksi Subsea System Development Program JIP to address the technical challenges presented by HPHT reservoir environments for development of 20,000-psi subsea systems.