MOSCOW (MRC) -- French company Technip, Europe’s largest oilfield-services provider by market value, has warned that energy companies are "putting pressure" on suppliers to lower costs and said profit margins may be trimmed by Russian sanctions, reported Hydrocarbonprocessing.
"There is greater uncertainty for all players," CEO Thierry Pilenko said on a conference call after the Paris-based company reported a decline in second-quarter earnings. "Some of our customers are taking a much slower and more combative approach."
Technip, which supplies equipment and builds installations for oil and natural-gas producers, had until now maintained orders were strong even as some companies reduced investment and pledged to lower costs.
With Total, Royal Dutch Shell and Chevron among Technip’s clients that plan to rein in spending, Pilenko acknowledged contracts could be fewer and harder to win.
As MRC informed before, in May 2014, Technip was awarded a front-end engineering design contract with Shell for work on a demonstration project in Scotland. The company will design a number of onshore elements for the Peterhead Gas Carbon Capture and Storage project in Aberdeenshire. The project is designed to capture, compress and transport 1 million tonnes of carbon dioxide per year via a pipeline to an offshore gas reservoir for storage below the North Sea.
Technip changed financial targets for this year, raising the outlook for margins in the subsea division and lowering it for the onshore-offshore section, in part due to uncertainty about how sanctions on Russian companies could affect the Yamal LNG project in Arctic waters.
Second-quarter net income declined to EUR158 million (USD213 million) from EUR162.4 million a year earlier, the company said in an earnings statement. That beat the EUR154.1 million-euro average of 15 analyst estimates compiled by Bloomberg.
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