Seagems targeting the spot market and offshore decommissioning

Although the focus of Seagems, one of the main operators of flexible pipelay support vessels (PLSVs) in Brazil, is on long-term contracts with federal oil company Petrobras, it started looking at opportunities in the spot market with private oil companies and outside the country. 

Another segment targeted by Seagem, formerly Sapura, is offshore decommissioning.

BNamericas talks to CEO Rogério Salbego about the new opportunities, the local market and the need for skilled labor.

BNamericas: What are the business prospects in Brazil?

Salbego: We have a good portfolio of agreed contracts that will provide security for our operations over the next few years. But we never settle for that and look for other opportunities. 

We’re closely monitoring the business potential of the Equatorial Margin, in Brazil, the Guianas and Suriname, for example. We’re also counting on the presence of our shareholders in the international market to leverage other opportunities for our company.

Our company recently underwent a rebranding and is now called Seagems. This has brought two main improvements. The first is that we stand out with a unique identity, preventing confusion that has been quite common in recent years with our shareholder Sapura Energy. The second improvement is that we’ve established two operational arms as Seagems: Seagems Offshore and Seagems Solutions.

This repositioning, accompanied by the division in scope, creates the opportunity for better interaction in the market, as it defines clear areas of operation. On the one hand, based on expertise in subsea engineering, administrative management and operations support, our intelligence operation in the offices; and, on the other, practical solutions in subsea engineering, in the offshore demands also operated with great skill and intelligence by the professionals on our vessels.

BNamericas: Do you foresee an increase in the number of goods and services contracts?

Salbego: In Brazil, there are a number of projects from independent operators that knock on our door from time to time and, due to the nature of our fleet's long-term contracts, we’re unable to meet them.

Aware of this demand, we began to study an asset-light model. The proposal is to use vessels from other shipowners that may be available, combined with our team and technical capacity to carry out projects in the spot market. This also applies to opportunities outside Brazil which, as mentioned before, come from supporting our shareholders' operations.

BNamericas: How is the demand for PLSVs?

Salbego: We have long-term contracts agreed with Petrobras for our entire fleet, which provides stability for the coming years. But, as I said, we’re also interested in expanding the volume of business and even our own fleet one day. 

This expansion is limited by the financing options and credit lines currently available, as they are more directed towards decommissioning, decarbonization and renewable energies, and not so much towards [oil and gas] exploration and production. We’re optimistic that these opportunities will arise again as the industry gets stronger. Our market is very cyclical and there will be opportunities for this.

BNamericas: Are there any bottlenecks in the segment?

Salbego: We have a pent-up demand for short-term contracts. We often receive requests, but as our entire fleet is committed to long-term contracts, we end up not being able to respond to the demand. I believe that another bottleneck is the lack of skilled labor, which is still a reality in our segment.

In 2014, as we were an entrant in the Brazilian market, we realized right from the start that we would have to train professionals, as finding them ready-made in the market would be unsustainable. So we set up our training center, initially to train ROV [remotely operated underwater robots] pilots and launch operators. 

Approximately 70% of our professionals in these areas had little or no experience with PLSVs, many of them without ever having worked on any type of offshore unit. This says a lot about the bottlenecks in our market and about Seagems because it translates, in its own DNA, into a philosophy that starts with the training of new professionals and extends to a sense of belonging, which is fundamental when we reinforce safety and performance campaigns, for example.

BNamericas: Are all your PLSVs working for Petrobras?

Salbego: The Onyx is contracted by Enauta for a subsea interconnection project in the Atlanta field. But it’s certain that the entire fleet will soon be back working on long-term contracts with Petrobras. The contracts have all been signed.

Our PLSVs were designed to meet the specific needs of the offshore environment of Petrobras projects, way back when the company was conceived. It's only natural that we have this strong bond. Even so, we’ve worked for several other operators, always looking to expand our client portfolio and put ourselves to the test in new challenges.

BNamericas: In addition to flexible lines, have vessels been used to install other critical subsea equipment, such as wet Christmas trees (WCTs), which connect the production system and the well, and subsea manifolds?

Salbego: Yes, but these are activities on a relatively low scale. These operations today are not significant in terms of turnover, but they are very important for demonstrating our vessels' versatility and operational capacity.

Some examples are the installation of six WCTs for [Italy’s] Eni in Mozambique, 11 manifolds for Petrobras, four giant MCVs [vertical connection modules] also for Petrobras, five rigid spools for Saipem and more recently the replacement of two thrusters on the Laguna Star, a Constellation drillship.

BNamericas: What are the future trends?

Salbego: As well as studying the asset-light market, we'll keep an eye on opportunities for growth and development.

In this sense, we’re keeping a close eye on Petrobras' decommissioning projects, given the volume of business that can be generated and the complementarity with the operational characteristics of our vessels.  

BNamericas: Are there any important tenders underway or planned in the coming months?

Salbego: We expect good opportunities in the decommissioning segment, and we don't rule out new tenders for PLSVs or even other specialized vessels.

BNamericas: Are the daily rates for PLSVs under pressure?

Salbego: Daily rates were under pressure at the end of 2021, when we signed contracts for the Diamante and Topázio PLSVs with absurdly low rates. In the last bidding process, however, we were successful in restoring the level of daily rates to values that we believe are correct for our activities.

There’s still room for improvement, given the high degree of specialization of our activity and the limited supply of vessels in the market.

BNamericas: What are the main technological challenges ahead? 

Salbego: Our technological challenges are focused on the operational safety of our activities. In this sense, we’re investing heavily in artificial intelligence to bring automation and remote operation solutions to our vessels, increasingly reducing human intervention in risky activities.

It’s important to clarify that the intention is not to reduce the number of employees or replace men with machines, but to ensure that our employees find a healthy and safe environment.