London, UK | – Italy’s Saipem is close to signing a joint venture with a big local partner in Nigeria just days after clinching a similar deal in China with PetroChina as the oil contractor seeks access to new markets.
Saipem, 43 percent owned by Italian oil major Eni, has seen some 10 billion euros ($11 billion) wiped off its market value over the past two years after two profit warnings, a corruption investigation in Algeria and a worsening outlook.
“The group is finalising the creation of a joint venture with a very important Nigerian partner to help it develop its business in the country,” a source close to the matter said.
Tumbling oil prices and rising costs have prompted oil majors worldwide to cut spending, prompting contract cancellations that have hurt contractors.
“The company is seeking to leverage its E&C (Engineering & Construction) competences and its vessel fleet to enter into new markets or grow its presence in existing markets with leading local operators,” the source said.
Saipem, which has been fined in a case relating to alleged corruption in Nigeria, already has a presence in the country, including the subsea development of the Egina Field with France’s Total.
The source said the Nigeria deal follows hard on the heels of a landmark joint venture signed with the PetroChina group last week.
The deal will create a new company well placed to build a strong position in the growing Chinese oil service sector, with a specific focus on turn-key projects likes LNG terminals, pipelines, and storage units.
“In a few months the joint venture will have the license to operate,” the source said. People’s Bank of China owns around 2 percent of Saipem.