LONDON: Lamprell hopes that the creation of a joint venture with Saudi Aramco will help to offset a muted earnings outlook that sent its stock tumbling.
The UAE rig builder cut its full-year forecast on Friday and warned that it did not expect revenue growth from potential contract awards until 2019.
That sent the stock of the London-listed company tumbling by more than 23 percent before partially recovering to trade more than 11 percent lower.
The company forecast revenues in the range of $370 million (SR1.4 billion) to $390 million this year compared to the lower half of the $400 million to $500 million range it reckoned in March.
It expects 2018 revenues to be about 10 percent lower.
Lamprell said it was continuing with a strategy review and “further operational efficiencies and geographical and sector diversification.”
The company’s bid pipeline rose to $3.1 billion at the end of June from $2.5 billion at the end of December, it said.
Lamprell struck a joint venture with Saudi Aramco, Bahri and HHI in May to establish and operate a fabrication yard in the Kingdom.
Once commissioned, the maritime yard will become one of the biggest in the region with 4.1 kilometers of quayside. It is expected to be partially operational by 2019 with full functionality reached by 2021, Lamprell said.
It could lead to the construction for 20 offshore drilling rigs over 10 years.
Lamprell CEO Christopher McDonald said: “The project will further strengthen our position in the region and will provide exposure to significant new opportunities in a key market for the energy industry.”
An extended period of oil price weakness has dampened demand for new oil rigs and hit regional rig builders and oilfield services companies such as Lamprell and Petrofac.
The company said that project completions and the slow pace of new contract awards brought yard activities to a “relatively low level.”
“There is significant profit recovery potential over time, but it is hard to predict the timing with any confidence,” said Investec.
Still, the company said it had started fabrication work on its flagship renewables contract for ScottishPower Renewables – the East Anglia One project.
The company also this year reached an agreement with Cameron, a unit of Schlumberger, ending a dispute over some jacking equipment.
It said that despite the row, the company still has a strong relationship with Schlumberger which has commissioned Lamprell to build two land rigs.
Lamprell looks to Aramco deal to brighten outlook as stock tumbles
Lamprell looks to Aramco deal to brighten outlook as stock tumbles
India seals $3bn LNG agreement with UAE
- Leaders hold talks to strengthen trade, defense ties
NEW DELHI, DUBAI: India signed a $3 billion deal on Monday to buy liquefied natural gas from the UAE, making it the Gulf country’s top customer, as the leaders of both countries held talks to strengthen trade and defense ties.
The agreement was signed during a very brief two-hour visit to India by UAE President Sheikh Mohammed bin Zayed Al-Nahyan for talks with Indian Prime Minister Narendra Modi.
They pledged to double bilateral trade to $200 billion in six years and form a strategic defense partnership.
Abu Dhabi state firm ADNOC Gas will supply 0.5 million tonnes of LNG a year to India’s Hindustan Petroleum Corp. for 10 years, the companies said.
ADNOC Gas said the agreement brings the total value of its contracts with India to over $20 billion.
“India is now the UAE’s largest customer and a very important part of ADNOC Gas’ LNG strategy,” the company said.
The UAE is India’s third largest trading partner and Sheikh Mohammed was accompanied by a government delegation that included his defense and foreign ministers. The two sides signed a letter of intent to work toward forming a strategic defense partnership, India’s Foreign Secretary Vikram Misri told reporters.
Misri, however, said that the signing of the letter of intent with the UAE does not mean that India will get involved in regional conflicts.
“Our involvement on the defense and security front with a country from the region does not necessarily lead to the conclusion that we will get involved in particular ways in the conflicts of the region,” he said.
