Developing long-term value

Saipem is an internationally oriented company. On account of its size and the importance of its activities, it plays a significant role in the marketplace and in the economic development and welfare of its employees and of the communities in which it operates. Saipem’s Business Model is based on the delivery of new, innovative and complex solutions utilising a globally integrated network of skills and assets.

The capacity to innovate

For Saipem, the capacity to innovate by developing new technologies, differentiating know-hows and methodologies and taking them up to industrial deployment is fundamental and, along with the ability to use existing skills in novel ways, shall become increasingly so in years to come with a view to strengthening the Company’s market leadership.

Cutting-edge assets must come from the ability to innovate if the Company is to provide effective answers to future market demands. Saipem is committed to creating an environment in which more inventions and innovations are conceived, developed and brought to fruition to serve the business, enhance effectiveness and facilitate access to new opportunities.

In 2013, Saipem carried out a restructuring of its research and development activities. The rationale behind this is the belief that the ability to offer advanced technological solutions represents a crucial factor for sustaining and enhancing the Company’s competitive advantage in both the medium and long term.

As part of the change, a new corporate research and development department has been set up with the goal of maximising and fully leveraging Saipem’s research and development efforts through careful management. The department has been assigned coordinating, planning and supervising functions for all research and development initiatives undertaken. The research and development departments of the Business Units remain focused on defining specific development proposals and directly managing projects and initiatives.

The restructuring initiative is expected to bear fruit in the near future. In the meantime, however, the year 2013 saw Saipem press on with its research and development programme, working on distinctive solutions in technologically-advanced sectors, such as the deep and ultradeep-waters and floating platform sectors and the development of new procedures and equipment for subsea excavation and pipelaying under extreme conditions.

Other fields of investigation involved the improvement of proprietary process technologies and the expansion of the Company’s portfolio of environmental services, also by making use of high-level technological collaborations with research centres and other industry players.

A few representative areas include the following:

  • Subsea separation: operations performed in offshore oil and/or natural gas field developments, especially relating to the equipment and technology employed for the extraction, treatment and transportation of oil or gas below sea level. The aim is to achieve qualification of subsea gas/liquid separation and liquid boosting stations to offer an optimised design for deep-water and/or high design pressure application.
  • SURF: in this area, Saipem’s aim is to identify, analyse and test innovative mechanical solutions to improve and develop proprietary flowline and riser solutions for deep-water, adapted to the Saipem fleet.
  • Floating LNG: this area is of utmost interest for the exploitation of natural gas. Saipem is present by developing innovative solutions such as a proprietary tandem offloading solution using floating cryogenic flexible hoses (alliance with Trelleborg).
  • Sealines: initiatives are under development to increase the pulling capacity of the installation in ultradeep-water, to improve the productivity and the quality of sealine construction, to prevent and reduce the risk of accidental flooding of the line and to extend the repair technology to applications in acidic environments. Furthermore, experiments nearing conclusion on techniques for the transplantation of the aquatic plant Posidonia at sea are confirming the positive results obtained in the laboratory.

These techniques are especially relevant for the remediation of damage caused by sealine trenching activities in Posidonia meadows.

  • Urea Zero Emission: Saipem is developing technology to eliminate all potentially noxious emissions from Urea plants, thus making its proprietary technology completely environmentally friendly. The project is currently at the stage of laboratory testing, with field testing targeted within two years.
  • Energy Efficiency: the designer of process plants is perpetually faced with a fundamental choice between low investment and low energy consumption. Saipem therefore aims to offer each potential Client a full portfolio of options in terms of energy consumption. Among the variety of alternatives that can be pursued in this field, technological innovation warrants a primary role. For this reason, following preliminary screening of several ideas implemented in 2012, a project targeting the identification and development of novel ways to increase the efficiency of process plants kicked off in 2013. Current lines of work are mainly focused on the recovery of unused or wasted energy and on the improvement of efficiency in heat exchange equipment, particularly air coolers. However, the search for more effective solutions is not limited solely to surface plants. Saipem’s technology developments in the field of subsea processing can also definitely contribute to improving energy efficiency by greatly reducing consumption during field life.

An indirect and important contribution to innovation will be finding ways to transfer the application of Saipem’s new project execution concepts so that they are closer to the markets and project sites. A recent example, as an additional building block to Saipem’s commitment to Local Content, was the creation of the Deep-Water Offshore Engineering and Technology centre in Luanda, Angola, for subsea engineering and project execution to be carried out to a large extent locally. This will be followed by a prefabrication yard in Guarujá, Brazil, and an engineering centre in Rio with similar objectives. Steps are also under way in Russia to create, together with a partner, an advanced engineering and project execution centre, as well as a fabrication yard. In the future, similar investments could also be undertaken in other new markets such as Mozambique.

These initiatives are the latest in a series of success stories, including the creation of substantial but local project design and execution centres in Calgary, Canada, Mexico City and Perth, Australia, which often transform Saipem’s innovations into practical applications.

The new Saipem Floaters business structure

The Floaters business line created in 2013 following the reorganisation of the Engineering and Construction Business Unit has its main offices in Saipem sa, which therefore acquires a Corporate role alongside its spearhead function in offshore activities and rigs and in maritime works.

The business line is currently active in two sectors:

  • Management and maintenance of the Saipem owned FPSOs leased out to clients.
  • The completion of turnkey facilities installed on floating hulls.

But Saipem is also extremely active on the commercial front. The objective is to become a key international player, especially on high-tech projects such as FLNGs, or else large-size and complex projects on which local content, promoted by Saipem as a business strategy, can become a competitive driver.

Saipem is focusing on the design and development of new technical solutions to meet the evolving needs of the Oil&Gas market. One current target is to develop floating gas liquefaction systems, required due to the growing demand for monetization of stranded and associated gas.

The market segment is particularly challenging from a technical point of view. Indeed, offshore gas turbines have limited capacities because very large heavy duty ones can only be implemented onshore. Considering the effect of motions, the asset needs to be equipped with special internals and a distinctive design in order to avoid fatigue and stress. An offshore environment requires compactness of spaces and process adjustments to reduce the flare load significantly. Finally, safety procedures and selection of equipment need to be applied and adapted to the specific environment.

Saipem has all the characteristics needed to succeed in this direction. These include:

  • Technical competence, expertise in both project management and engineering, onshore and offshore, as required for the completion of these types of project.
  • Strategic alliances with specialist partners for offshore plants.
  • Proven experience in large new-build FPSO key offshore and onshore projects such as the Arzew GNL 3Z liquefaction EPC onshore project in Algeria, the Zcina LPG Recovery Plant EPC onshore project in Algeria and the OLT regasification EPCI project offshore Italy (first permanent open sea FSRU).
  • A multi-local organisation which facilitates high levels of reactivity and autonomy.
  • Financial strength to manage and deliver large-scale projects.

The main constituents of Saipem’s current approach in the Floaters business line are:

  • Continuing growth of internal expertise to provide all the competencies required from the very early stages (feasibility studies, selection of technical configurations, technical and economic sensitivity analyses) on up to execution, commissioning, start-up and operation.
  • Development and design of advanced solutions for mooring concepts.
  • Development of generic designs for conversions, based also on innovative solutions for process modules.
  • Availability of fabrication capabilities for topside modules in experienced Saipem yards.
  • Leveraging of strong local presence in key areas in order to ensure proximity to clients and projects and maximisation of local content.
  • Maintaining relations with key players, such as shipyards (for both new-builds and conversions), shipowners, key suppliers and process licensors.

Quality in our DNA: aiming for excellence

Saipem’s success has been forged by a history of excellence and the ability to respond quickly to new developments and market needs, even anticipating them. July 2013 marked the launch of ‘Bring quality to the next level’, a new programme and tool for further strengthening the Company’s quality system, promoting a corporate culture aimed at the continuous pursuit of excellence and the highest standards of quality in the sector and ensuring a greater degree of competitiveness and strength from a commercial point of view.

The programme has a two year life span and is presided over by a Steering Committee composed of the heads of various business functions, which reports regularly to the Executive Committee on the progress of the activities.

The latter, which commence after the first quality assessment stage of the Company quality management system, are carried out by interdepartmental work groups, each under the responsibility of a Workstream Leader and the supervision of a Workstream Sponsor. They have been identified for the development of five workstream priorities:

  • ‘Cost of non-quality’: to ensure the definition of methodologies and tools for the identification and tracking of non-quality costs on individual projects and, more generally, the Company.
  • ‘Lessons Learned’: to ensure the definition and implementation of methodologies and systems that guarantee the capitalisation of experience on projects and the sharing of both successful and unsuccessful practices, in order to spread knowledge to all levels of the Company concerned. 
  • ‘Supply Chain of Materials’: to ensure analysis of the entire supply chain of Saipem materials, whilst considering the causes of recurring non-compliance of materials supplied, in order to identify possible areas of intervention and process optimisation.
  • ‘Offshore Fabrication Subcontractor’: to ensure analysis of the supervision process of construction work subcontracted out to third party fabrication yards, in order to identify the most appropriate operating procedures and mechanisms that guarantee achievement of the objectives of the subcontracted activities.
  • ‘Top management critical metrics-Drilling’: to ensure the design of an integrated system of Key Performance Indicators (KPI) that allows the management of companies and business units to monitor the economic and operating results of the Drilling business systematically and to implement corrective actions, where necessary.

A communications plan has been implemented parallel to these five workstreams to ensure the involvement of all Saipem staff. Based on the results achieved in this first phase, which is due to draw to a close in March 2014, a new workstream will be launched in April.

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