Saipem Set to Resume Venezuela Operations Following U.S. Sanctions Relief

By Francesca Landini

Sanctions Shift and Saipem’s Near‑Term Plans

MILAN, Feb 25 (Reuters) - Italian oil contractor Saipem is ready to resume activities in Venezuela after the easing of U.S. sanctions as it expects demand emerging from oil majors later this year, Chief Executive Alessandro Puliti said on Wednesday.

Client Demand Outlook in Venezuela

"Things in Venezuela are changing very quickly. It's a country where we worked a lot in the past, and we are ready to return as soon as there is demand from clients," Puliti said in a post-results call.

Contracts could come from both international and U.S. oil companies, Puliti said, adding these groups were currently assessing the situation and devising plans for the Latin American country.

"As of today, we have not received requests to participate in a tender or to carry out engineering studies in preparation for tenders... I expect this may come later in the course of the year," he told a press briefing.

U.S. Sanctions and New Licenses

The United States relaxed sanctions on Venezuela's energy sector earlier this month, issuing two general licenses that allow global energy companies to operate oil and gas projects in the OPEC member and for other companies to negotiate contracts to bring in fresh investments.

Companies Authorized to Operate

The Treasury Department's Office of Foreign Assets Control issued a general license to Chevron, BP, Eni, Shell and Repsol, who still have offices in the country and stakes in projects, and are among the main partners of state-run company PDVSA.

The country has vast oil reserves but majors and energy contractors face a dilapidated energy infrastructure.

Mozambique LNG Project Update

WORKING FOR MOZAMBIQUE PROJECT'S RESTART

In Mozambique, where TotalEnergies and the government have announced the restart of a $20 billion liquefied natural gas project, Saipem is currently working with the French company to review orders after a long suspension.

Purchase Orders and Resumption Costs

"Currently, we are revisiting purchase orders and subcontracts to reflect escalation and resumption costs, but this process will not be completed by the end of the first quarter of this year," Puliti said.

Subsea7 Combination Timing

Saipem still expects to complete its merger with Norway's Subsea7 in the second half, Puliti said.

Earnings Guidance and Outlook

The energy contractor said on Tuesday it expected its adjusted core earnings to rise to roughly 1.9 billion euros ($2.2 billion) this year, from 1.7 billion euros in 2025.

Exchange Rate Note ($1 = €0.8488)

($1 = 0.8488 euros)

(Reporting by Francesca Landini, editing by Alvise Armellini and Louise Heavens)