Horizon to bid for US$85mn Pemex deals

Texas-based marine construction company Horizon Offshore is preparing three bids for Mexico's state oil company Pemex that would provide up to US$85mn in projects next year, company officials announced in a third quarter conference call. Bids are due year-end for work slated to start in the February-March timeframe. Because the Global Offshore Mexico subsidiary of Horizon's Houston-based competitor Global Industries is already busy with projects in Mexico, "we believe that will occupy some equipment and give us a better chance on these next two or three [bids] that are out right now," Horizon president and CEO Bill Lam said. Horizon has rebuilt its corporate infrastructure in Mexico, which includes 40 people, to accommodate the work. "I like our chances and relationship with Pemex," Lam said. The company has billed Pemex for US$290mn in work since 1996, collecting US$228mn to date. With a fleet of 13 vessels, Horizon performs pipelay and heavy lift services in the Gulf of Mexico and other international markets. If the Texas company wins its bids next year, works would occupy two vessels for six months. Horizon can benefit from Pemex's "tremendous" expansion plans, the executives said. "Pemex plans to drill some 75 wells, mostly in waters that are shallow enough where Horizon can service these programs," Lam said. "All indications are Pemex will follow through with this program." Horizon posted a US$0.3mn 3Q net loss this year, down from a net income of US$1.8mn in the same period last year. Gross profit in Q3 fell 35% to US$7.5mn year-on-year, while EBITDA dropped 7.7% to US$7.3mn. Low levels of vessel utilization, poor weather conditions and lower profit margins in US and southeast Asia hindered the company's gross profit, the company said in a statement.