Successful delivery of Prosperity, Sepetiba FPSOs boosts SBM Offshore’s Q1 revenue

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SBM Offshore reported a strong performance in its first quarter results for 2024, with revenues driven by the successful delivery and operation of the Prosperity and Sepetiba floating production, storage and offloading (FPSO) vessels to Guyana and Brazil. Øivind Tangen, Chief Executive Officer (CEO) of SBM Offshore, stated, “We have delivered good results this quarter in line with expectations and we maintain our full year guidance.”

The FPSO Prosperity reached its target oil production of 220,000 barrels per day (b/d) since January 2024, while FPSO Sepetiba achieved flare-out in April 2024. Tangen highlighted that these vessels, with joint initial production of more than 400,000 b/d, demonstrate SBM Offshore’s ability to handle large and complex FPSO projects.

The company’s directional revenue for the quarter stood at US$871 million, marking a 17% increase compared to US$742 million in the same period in 2023. This growth is primarily attributed to the Lease and Operate segment.

Year-to-date Directional Lease and Operate revenue increased by 22% to US$554 million, a result of the inclusion of FPSO Prosperity and FPSO Sepetiba into the fleet and an increase in reimbursable scope on the fleet. This increase was partially offset by the shift to an operating contract for FPSO Liza Unity following its purchase by the client in Q4 2023.

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Directional Turnkey revenue also saw a 9% increase, reaching US$316 million. This rise was driven by the front-end engineering and design (FEED) contract for FPSO Jaguar and support through brownfield activities, though partially offset by lower construction portfolio revenue as projects near completion.

The company’s directional net debt rose by US$187 million to US$6.8 billion as of the end of Q1 2024. This increase was due to drawings under project finance facilities, reflecting ongoing investment in the construction of three FPSOs. SBM Offshore employs interest rate swaps to hedge interest rate risk, maintaining a hedge ratio above 90% for its floating-rate debt and associated swaps.

SBM Offshore’s 2024 directional revenue guidance remains at approximately US$3.5 billion, with around US$2.2 billion expected from the Lease and Operate segment and US$1.3 billion from the Turnkey segment. The company also maintains its 2024 directional guidance for earnings before interest, taxes, depreciation and amortization (EBITDA) at approximately US$1.2 billion.

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