Page 12 - MARKETS & STRATEGY

MARKETS & STRATEGY

Thierry Pilenko, Chairman & CEO, and Nello Uccelletti, President Onshore/Offshore, visiting the Yamal LNG project site of Sabetta, Russia.

In 2015, we intensified the work with our clients to optimize their projects’ costs through early-stage involvement

STAYING STRONG THROUGH AND BEYOND THE DOWNTURN

In today’s harsh and prolonged downturn in the oil and gas industry, our current strategy aims to adapt to resist and anticipate to shape the future.

2015 was marked by a decrease in oil prices due to a large oil supply glut, even though oil consumption surged to record levels. In the long run, the International Energy Agency’s (IEA) World Energy Outlook 2015 sees energy demand increasing, between 2016 and 2040 in all its scenarios.

In this environment of depressed crude oil prices and significant reduction in our clients’ investments, opportunities will naturally be rarer than in previous years. We will demonstrate pugnacity, agility and intelligence to seize any that arise. We foresee such opportunities more specifically in refining, pre-salt and floating liquefied natural gas (FLNG).

FOCUS ON EFFICIENCY

In this challenging environment, our backlog of €17 billion gives us visibility to start 2016. We are primarily focused on executing our projects ensuring safety, quality and security. In addition, we continued to implement cost efficiency measures and accelerated them in July with a restructuring plan that aims to save approximately €830 million, of which €700 million will be delivered in 2016 and the balance in 2017. Following first implementation of these cost measures, we were able to identify additional cost savings, reaching close to €1 billion by 2017. Also, we intensified the work with our clients to optimize their projects’ costs through early-stage involvement deploying Technip’s know-how and technology. We continue to invest in Research and Development (R&D), as well as in technology to offer more efficiency and reduce time to first oil.

POWER OF PARTNERSHIP

As the industry faces an unprecedented market environment, clients seek innovative and collaborative ways to decrease the cost of their investments. Ahead of our time, we have always valued cooperation with our peers for the benefit of our clients. Whether it is in technologies, materials, manufacturing or construction, we never shy away from building mutually beneficial relationships. Three years after the worldwide alliance with Heerema, we launched in 2015 a groundbreaking alliance with FMC Technologies which led to the creation of the Forsys Subsea joint venture. This enables cost effective solutions, bringing up to 30% savings for our clients.

Our partnerships contribute to broadening our portfolio of solutions, providing our clients with a diversified offering.

CLOSE TO CLIENTS

All these efforts rely on our dedication to maintaining close ties with our customers. Whether technical, environmental or economic, the challenges our clients face are best addressed through our strategy of early involvement and integrated offering. It leverages our deep understanding of the project’s stakes to make the right decisions as early as possible to enhance return on investment. Finally, our strategy also enables us to optimize value creation, risk management and sustainable solutions at each step of the project’s lifecycle.

“Whether it is in technologies, materials, manufacturing or construction, we never shy away from building mutually beneficial relationships, to the advantage of our clients.”
MAINTAINING STRATEGIC FOCUS