Saipem joint venture pushes with US drillers a white: sources

MILAN / LONDON (Reuters) – Italian oil services group Saipem is trying to lure big US rivals into joint ventures but has so far failed to get contracts for operations. drilling of a maximum value of 1.5 billion euros (1.7 billion dollars), said six sources Reuters.

Saipem, controlled by the Italian state lender CDP and the oil company Eni, needs joint venture agreements to boost growth and strengthen its balance sheet after years of declining margins.

Despite a recovery in oil prices this year, sluggish demand is still testing the prospects for oil services companies and is expected to trigger the consolidation of a sector that is recovering further after the markets slump. Energy of 2014.

Saipem has been reviewing options for onshore and offshore badets over the past nine months to find a partner to help reduce costs, sources said.

The Milan-based company hired Citi last year to gather interest from land-based drilling equipment companies, including Patterson-UTI, Pioneer Energy Services, Helmerich and Payne, the sources said.

She also asked the Swiss driller Transocean, which operates in the United States and Canada, to consolidate some of their respective badets, but the negotiations were unsuccessful, said one source.

Saipem and Transocean declined to comment, as representatives of Patterson-UTI, Pioneer Energy Services and Helmerich and Payne were not immediately available.

Italy's biggest oil subcontractor started looking for partners in a joint venture last summer, but market difficulties have been held back by tough market conditions for international drillers and high price expectations.

Patterson-UTI, Pioneer and Helmerich and Payne are among the top oil drilling companies in the US, but have been hard hit by the industry downturn and are taking a cautious approach to mergers and acquisitions (F & P). A), said these same sources.

In previous attempts to find a partner, Saipem boss Stefano Cao had held talks with Subsea 7 in 2017, but negotiations failed, two sources said. Subsea later ventured into a hostile approach with regard to McDermott.

Saipem, which recently written off its Venezuelan badets, recorded a 30% drop in core profits from its offshore drilling unit, while onshore activity increased by 24% to 135 million euros.