To our Stakeholders
Letter Stakeholders

Letter to the Shareholders

Dear Shareholders, 

during 2015 the price of oil, having begun a rapid descent in the latter part of the previous period ($50 a barrel), recovered up to the beginning of May ($70 a barrel) and then endured a further drastic fall at the end of the year to below $40 a barrel.

The causes of this phenomenon are attributable essentially to a change of energy market scenario with an oil supply greater than demand. The phenomenon began in the second half of 2014 with the decision of the OPEC countries not to react to this situation by reducing their own market share. The subsequent decrease in oil prices had a negative impact on oil company investments and those of producer countries who witnessed a significant fall-off in their earnings. In those months, the market, which is seeing the development of increasingly complex projects, has suffered the effects of the new scenario. The main consequences of this situation are the awarding of a limited number of projects and an increasingly rigid negotiating position adopted by clients in recognising change orders and claims which emerge during works execution.

This had an impact in terms of fewer acquisitions of new contracts in 2015 compared to 2014 (down 64%) with a particularly high weighting in Engineering & Construction.

This drastically deteriorated market context had additional effects in the competitive scenario in which Saipem operates, including:
- delays or cancellations of orders in progress, and a more rigid approach of clients during negotiations when dealing with
change orders and other changes occurring during project execution;

- an increase of credit risk in certain geographic areas;

- the need to review the operating strategy and to bring forward to the end of 2015 the drafting of a new strategic plan;

- the need to review the strategy of negotiations for pursuing settlements with clients in order to minimise potential legal
proceedings and seek an immediate financial benefit;

- the need to act quickly and decisively on the cost structure by launching programmes for optimising operating, overhead and
investment costs.

During 2015, Saipem faced a markedly deteriorated scenario by launching an important operating and investment cost optimisation programme, defining the guidelines of the ‘Fit for the Future’ project, implementing a revision of the items of the balance sheet that takes into account the new context, drafting a new strategic plan, defining a complex financial manoeuvre consisting of a capital increase of €3.5 billion and a refinancing of €3.2 billion needed to consolidate the Company’s equity situation and make it financially autonomous. This financial manoeuvre was concluded positively in the first quarter of 2016.

Saipem’s operating profit was therefore supported by optimisation actions, such as limiting its presence in certain countries, rationalising engineering and construction capacity, reducing overheads and disposing of obsolete and unprofitable vessels. Taken together, these actions had a positive impact on EBIT in the amount of €150 million.

The year’s key figures were:

- adjusted EBIT of -€254 million, which includes a reduction of €718 million through the write-downs in the second quarter of 2015 of contractual variations and claims subject to negotiation regarding contracts awarded over the last few years and the write-down of receivables in Venezuela;

- EBIT of -€452 million, including the write-down of certain assets and two construction yards;

- capital expenditure amounting to €561 million;

- net borrowings amounting to €5,390 million;

- acquisition of new orders in the amount of €6,515 million and a residual portfolio of orders amounting to €15,846 million, affected by the cancellation of the remaining orders of the South Stream contract and the charter agreements of the Scarabeo 5 and Saipem 12000 vessels.

In Offshore Engineering & Construction revenues were down by 4%, with the lower volumes recorded in North and South America offset partly by the greater volumes in Azerbaijan and Kazakhstan. The adjusted operating result (EBIT) amounted to €192 million, a significant worsening if compared with the figure of €435 million of 2014. This was due mainly to the cancellation of the South Stream project and the lower profitability of projects in South America. The 2015 operating result (EBIT) was €54 million following the write-down of some fleet assets and a construction yard for a total of €138 million.

Onshore Engineering & Construction saw revenues down by 26%, primarily through the effect of the write-down of contractual variations and claims under negotiation in relation to various contracts of lower volumes in North America, Australia and Western Africa. Adjusted operating result (EBIT) amounted to a loss of €693 million (compared with the figure of -€411 million in 2014). However, the year saw a recovery of margins in the second quarter thanks to a positive contribution from new projects which allowed the Company to break even. 2015 operating (EBIT) amounted to a loss of €742 million, affected by the €49 million write-down of a construction yard.

Drilling operations contributed positively, with an adjusted operating result (EBIT) of €247 million, down from the €441 million recorded in 2014, primarily through the effect of the decreased contribution of the semi-submersible platforms Scarabeo 3 and Scarabeo 4 (Offshore Drilling), which had operated for the whole of 2014, and through the effect of the write-down of a proportion of overdue receivables following the greater country risk of Venezuela, and the costs of the inactivity of vessels in South America during the second part of the year.

The operating result (EBIT) amounted to €236 million, including the write-down of the semi-submersible rig Scarabeo 4, sold for scrapping.

In 2015, there were two fatal accidents in Saudi Arabia. In-depth investigations were carried out into these events. The causes were identified and corrective actions are currently being implemented. The LTIFR (Lost Time Injury Frequency Rate) stood at 0.31, slightly up compared to 2014 (0.28), but in reality confirming a multi-annual trend of performance improvement. Attention to health and safety is at all times at the highest levels and awareness raising and training programmes, as well as risk analysis and implementation of prevention and protection measures, have been adopted on all main sites, yards and vessels where Saipem operates.

Capital expenditure in 2015 was €561 million. The primary activities related to the maintenance of the asset base comprising the fleet of vessels for Offshore Engineering & Construction, the class reinstatement of the drillships Saipem 10000, Saipem 12000, Perro Negro 2 and Perro Negro 8, as well as the improvements to and modifications of other onshore drilling rigs destined to operate in Saudi Arabia.

As anticipated, the capital increase of approximately €3.5 billion and the refinancing of the residual debt of €3.2 billion were initiated in the fourth quarter of 2015, and will be completed in the early months of 2016, in order to reinforce the Company’s equity structure. Thanks to a solid financial structure, an efficient operating model, and our distinctive expertise, Saipem is now in a strong position to improve profitability, generate cash flow and create value for its shareholders. Contemporaneous with this operation, Eni SpA sold a holding amounting to 12.5% of the share capital of Saipem to Fondo Strategico Italiano SpA; Eni SpA and Fondo Strategico Italiano SpA have stated that the assets related to the governance agreed upon in the inter-company agreement and underwritten by them in relation to the shareholding in Saipem SpA, are directed towards realising joint control over Saipem by Eni SpA and Fondo Strategico Italiano SpA.

Consequently, from January 22, 2016, Saipem is no longer under the direction and coordination of Eni SpA.

In 2016, in a market context showing no signs of recovery, Saipem envisages revenues in excess of €11 billion, a forecast that takes account of the visibility of the activities of the existing portfolio of orders. EBIT is forecast to be in excess of €600 million; net profit is expected at around €300 million. Capital expenditure will amount to €500 million, below the final figure for 2015, thanks to the adoption of measures for optimising and improving efficiency and for reducing net indebtedness, predicted to fall to €1.5 billion at year end 2016.

March 16, 2016

for the Board of Directors

The Chairman
Paolo Andrea Colombo

The Chief Executive Officer (CEO)
Stefano Cao

At a glance
We are one of the global leader in drilling services, as well as in the engineering, procurement, construction and installation of pipelines and complex projects, onshore and offshore, in the oil & gas market
Mission
Values

Mission

We approach each challenge with innovative, reliable and secure solutions to meet the needs of our clients. Through multicultural working groups we are able to provide sustainable development for our company and for the communities in which we operate.

Mission

Innovation

Health, safety and
environment
Multiculturalism

Passion

Integrity
Operating review
New contracts
Backlog
Capital expenditure
Saipem Group - New contracts awarded during the year ended December 31 2014 2015
(Euro million)  Amount % Amount %
Saipem SpA 5,729 32 2,243 34
Group companies 12,242 68 4,272 66
Total 17,971 100 6,515 100
Offshore Engineering & Construction 10,043 56 4,479 69
Onshore Engineering & Construction 6,354 36 1,386 21
Offshore Drilling 722 4 234 4
Onshore Drilling 852 4 416 6
Total 17,971 100 6,515 100
Italy 529 3 279 4
Outside Italy 17,442 97 6,236 96
Total 17,971 100 6,515 100
Eni Group 1,434 8 507 8
Third parties 16,537 92 6,008 92
Total 17,971 100 6,515 100

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New contracts by geographical area

(€6,515 million)

New contracts by geographical area

Download XLSDownload PDF

Saipem Group - Backlog as at December 31 2014 2015
(Euro million)  Amount % Amount %
Saipem SpA 7,167 32 5,386 34
Group companies 14,980 68 10,460 66
Total 22,147 100 15,846 100
Offshore Engineering & Construction 11,161 51 7,518 47
Onshore Engineering & Construction 6,703 30 5,301 34
Offshore Drilling 2,920 13 2,010 13
Onshore Drilling 1,363 6 1,017 6
Total 22,147 100 15,846 100
Italy 689 3 496 3
Outside Italy 21,458 97 15,350 97
Total 22,147 100 15,846 100
Eni Group 2,458 11 1,736 11
Third parties 19,689 89 14,110 89
Total 22,147 100 15,846 100

Download XLSDownload XLS

Backlog by geographical area

(€15,846 million)

Backlog by geographical area

Download XLSDownload PDF

Capital expenditure   2014 2015
  (Euro million)    
Saipem SpA   117 102
Group companies   577 459
Total   694 561
Offshore Engineering & Construction   260 168
Onshore Engineering & Construction   55 36
Offshore Drilling   180 247
Onshore Drilling   199 110
Total   694 561

Download XLSDownload XLS

Business Units
Offshore Engineering
& Constuction
Onshore Engineering
& Constuction
Offshore Drilling
Onshore Drilling
Business Units

% total revenues

60%
Offshore Engineering
& Constuction

Economic highlights (Euro million)

6,890
Net sales from operations

(6,401)
Cost of sales

489
Gross operating result (EBITDA)

(297)
Depreciation, amortisation and impairment

192
Adjusted operating result (EBIT)

(138)
Impairment

54
Operating result (EBIT)

Business Units

% total revenues

24%
Onshore Engineering
& Constuction

Economic highlights (Euro million)

2,788
Net sales from operations

(3,442)
Cost of sales

654
Gross operating result (EBITDA)

(39)
Depreciation, amortisation and impairment

693
Adjusted operating result (EBIT)

(49)
Impairment

742
Operating result (EBIT)

Business Units

% total revenues

9%
Offshore Drilling

2015 in numbers

79
Wells

145,199
Meters Drilled

Economic highlights (Euro million)

1,067
Net sales from operations

(531)
Cost of sales

536
Gross operating result (EBITDA)

(241)
Depreciation, amortisation and impairment

295
Adjusted operating result (EBIT)

(11)
Impairment

284
Operating result (EBIT)

Business Units

% total revenues

7%
Onshore Drilling

2015 in numbers

330
Wells

807,531
Meters Drilled

Economic highlights (Euro million)

762
Net sales from operations

(625)
Cost of sales

137
Gross operating result (EBITDA)

(185)
Depreciation, amortisation and impairment

48
Adjusted operating result (EBIT)

Stakeholders Engagement
Identifying stakeholders and understanding their needs and expectations is an essential step for defining an effective engagement strategy in every location where we operate.
Engagement
Feedback
Materiality
stakeholder engagement animation
Clients
  • Customer Satisfaction questionnaires.
  • Direct meetings with clients in countries like Azerbaijan, Brazil, Canada, Mexico, Mozambique, Oman and the United States, to involve them in sustainability aspects.
  • 29 clients involved in Saipem’s Materiality Assessment.
  • Direct involvement in a few projects, especially in Angola and Indonesia, in initiatives for the community in the area.
Employees
  • Launch of the second Strategy LineUp, a cascade-type process of communication of the strategic priorities and corporate goals to all Company employees. It was implemented in 54 countries around the world, for a total of 80 meetings.
  • Inclusion for the first time of the sustainability section in the 2015 Engagement Survey and responses from about 8,000 employees.
  • Involvement of local employees in several countries, such as Brazil, Indonesia, Kazakhstan, Peru, and Venezuela, in local sustainability initiatives.
  • Organisation of the HOPE (Human OPerational Environment) programme, a specific training course on Human Rights, involving local management and client’s representatives in Angola.
  • Meetings and workshops on sustainability targeted at managerial positions.
Vendors
  • Periodic meetings with vendors with strategic agreements.
  • Audits on social responsibility at vendor sites in India, China, Bahrain and Saudi Arabia.
  • HSE and social responsibility forums for local vendors in Angola, Saudi Arabia, Nigeria and Turkey.
  • 89 suppliers surveyed, as part of the project of participation in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
  • Organisation of a Due Diligence day.
  • Engagement of local vendors to participate and support community initiatives in Kazakhstan, Peru and Colombia.
  • 19 suppliers and business partners involved in Saipem’s Materiality Assessment.
  • Interviews with 6 Italian suppliers of goods and services.
Government and local authorites
  • Institutional relations and, in many cases, proactive cooperation to implement joint local development initiatives.
  • Cooperation with health ministries, hospitals or local medical centres for awareness raising projects concerning diseases such as malaria or AIDS in countries, for example the Congo, Angola and Nigeria, and other types of cooperation with local health authorities in Peru, Angola, Brazil, Indonesia and Kazakhstan.
  • A number of cooperation projects on different issues undertaken in Kazakhstan, Italy, Indonesia, Azerbaijan and Angola.
  • 5 representatives of local authorities in Indonesia, Kazakhstan, Brazil and Italy involved in Saipem’s Materiality Assessment.
Local organization and NGOs
  • Several initiatives for communities developed through partnerships and cooperation with non-governmental organisations.
  • Cooperation with the Eurasia Foundation of Central Asia (EFCA) in Kazakhstan with a view to completing initiatives aimed at education in the local community.
  • Work with Junior Achievement Azerbaijan (JAA) to reinforce the technical skills of university students continuing in the programme.
  • In Angola, cooperation with the ‘Mentor Initiative’ on projects aimed at combatting malaria, and improving the skills of local medical personnel.
  • 3 representatives of non-governmental organisations involved in Saipem’s Materiality Assessment.
Local Communities
  • A public meeting held with the population of the Kuryk village to present and discuss the Ersai sustainability plan.
  • Several meetings held in Nigeria with the Rumuolumeni communities with a view to updating the Memorandum of Understanding (MoU).
  • Initiatives and projects for cooperation with local communities implemented in Angola, Bolivia, Brazil, Colombia, Congo, Indonesia, Kazakhstan, Nigeria, Peru and Venezuela.
  • Cooperation in many countries with local schools and universities to encourage the development of human capital. Some initiatives include the organisation of internship and research projects (Angola, Azerbaijan, France and Indonesia), the distribution of scholarships (Croatia and Nigeria), and the provision of training courses (Nigeria and Italy).
  • 7 representatives of universities and other local institutions, associations and non-governmental organisations in Europe, South America and Asia involved in Saipem’s Materiality Assessment.
Financial stakeholders
  • Presentation of the new Business Plan and the overall strategy, including the launch of a capital increase in 2016 during the Investor Day held in London in October.
  • Organisation of 13 road show days and attendance at 3 international investor conferences where Company representatives exhibited Saipem’s activities and results.
  • 2 reverse-road show days hosted in Milan.
  • Over 450 individuals, including portfolio managers and buy/sell side analysts, contacted through one-to-one meetings, group meetings and conference call or video conference meetings, while more than 1,350 people attended the four quarterly financial results conference calls and webcast.
  • 10 financial stakeholders involved in
    Saipem’s Materiality Assessment.
  • Preparation of specific reports regarding aspects of sustainability for Engagement International, the Ethical Council, FTSE4Good, Generali AM, GES, ISS Ethix, MSCI, RobecoSAM, SustainAlytics and Vigeo.
    Saipem also participated in the Carbon Disclosure Project (CDP).
stakeholder engagement animation
Clients

The clients provided their feedback through the Customer Satisfaction questionnaires (91), also expressing their opinion on the methods used by Saipem in its management of local stakeholders and the value generated in the area.
In addition, the questionnaire for the assessment of materiality was used to indicate their expectations from a contractor like Saipem. A number of very interesting issues linked to operating efficiency and the protection of health and safety, promotion of Local Content and community relations, arose from the study.

Employees

This year, the Company obtained direct feedback through the Engagement Survey regarding the expectations and level of satisfaction of its own employees.
The majority of employees show strong attention to sustainability themes and recognise their importance in Saipem’s economic performance and future strategy. Safety, People Management and Technology Innovation were the most important issues.

Vendors

The suppliers involved in the training sessions provided highly positive feedback on the activities organised.
The six Italian suppliers interviewed described Saipem as an important partner with which they had been able to grow, participate in challenging projects and cooperate for many years with satisfaction. The results of Saipem’s Materiality Assessment highlighted the attention of the suppliers to issues of development of personnel and protection of their safety, security of assets and business ethics.

Government and local authorites

Observance of local laws and cooperation are priority requirements for the local authorities and governments.
The opportunity to cooperate proactively on matters that are important for the country is always considered constructive and beneficial to both parties.

Local organization and NGOs

Non-governmental organisations can express interest in one or more specific topics on which they focus their attention and mission.
In general, the issues that appeared most important to these stakeholders concerned education, environmental protection and biodiversity, and respect for Human Rights with particular attention to the subject of diversity.
Generally speaking, the possibility of cooperating directly with Saipem on issues of interest is considered positive and advantageous.

Local Communities

Feedback obtained from the local communities is monitored as described in the Stakeholder Engagement process. In some countries, such as Nigeria and Azerbaijan, the Company has also implemented grievance monitoring systems.
Representatives of the local communities have used Saipem’s Materiality Assessment questionnaire to express their opinions about how Saipem operates and what their priorities are.

Financial stakeholders

The financial stakeholders are very interested in the Company’s management practices, particularly in corporate governance and the system of internal control. Another topic considered highly significant concerns the management of human resources. The stakeholders who responded to the questionnaire assessing materiality issues said that sustainability is already, or will soon become, a factor affecting investment decisions. Investors showed interest in Saipem’s approach to climate change. Indeed they renewed the invitation to Saipem to participate in the Carbon Disclosure Project (CDP) 2016.

A strong and focused materiality assessment is the cornerstone of a sustainability strategy that is consistent with the core business, meets stakeholder expectations, and produces high-impact results for us and for society.

Framing

  • Research & Analysis
  • Identification of
    significant issues

Prioritisation

  • Employee engagement analysis
  • External stakeholder survey
  • Saipem Management working session

Validation

  • Validation by the
    Sustainability Committee

Material issues

Sustainability plan

2015 Material Issues

Anti-corruption
and ethical
business practices

Transparency

Ethical
supply chain

Labour rights

Safety

Safe operations,
asset integrity and
process safety

Spill prevention
and response

Technological
innovation andbusiness flexibility

Training and
development

Local social
licence to operate

Local employment

Local procurement

Anti-corruption
and ethical
business practices

Transparency

Ethical
supply chain

Labour rights

Safety

Safe operations,
asset integrity and
process safety

Spill prevention
and response

Technological
innovation andbusiness flexibility

Training and
development

Local social
licence to operate

Local employment

Local procurement

2016 Sustainability Plan

Anti-corruption
and ethical
business practices:

run operations respecting ethical business best practices. Promote employee awareness of anti-corruption.

Transparency:

provide complete information that meets stakeholder expectations and current regulations.

Ethical
supply chain:

engage supply chain on business ethics aspects.

Labour rights:

respect international best practices on labour rights and monitor the effective compliance.

Safety:

reinforce safety processes and people competencies, including those of vendors and subcontractors.

Safe operations,
asset integrity and
process safety:

run safe operations for people and the environment and ensure integrity of assets.

Spill prevention
and response:

reduce the frequency and the volume of spills, and improve spill response measures and systems.

Technological
innovation andbusiness flexibility:

align Saipem’s technologies to business needs and the market scenario.

Training and
development:

bring resources’ skills in line with business needs.

Local social
licence to operate:

further integrate the Company with the local context through the active engagement of local stakeholders.

Local employment:

attract and develop local skills.

Local procurement:

increase the quality and the volume of local goods and services in strategic areas.

Anti-corruption
and ethical
business practices:

run operations respecting ethical business best practices. Promote employee awareness of anti-corruption.

Transparency:

provide complete information that meets stakeholder expectations and current regulations.

Ethical
supply chain:

engage supply chain on business ethics aspects.

Labour rights:

respect international best practices on labour rights and monitor the effective compliance.

Safety:

reinforce safety processes and people competencies, including those of vendors and subcontractors.

Safe operations,
asset integrity and
process safety:

run safe operations for people and the environment and ensure integrity of assets.

Spill prevention
and response:

reduce the frequency and the volume of spills, and improve spill response measures and systems.

Technological
innovation andbusiness flexibility:

align Saipem’s technologies to business needs and the market scenario.

Training and
development:

bring resources’ skills in line with business needs.

Local social
licence to operate:

further integrate the Company with the local context through the active engagement of local stakeholders.

Local employment:

attract and develop local skills.

Local procurement:

increase the quality and the volume of local goods and services in strategic areas.

Creating shared value
Creating shared value implies embedding sustainability in the corporate culture, meaning an inclusive business model and opportunities to generate long-term positive value for society. We have always focused on working responsibly, collaborating with local stakeholders, providing innovative solutions for our clients: key drivers for our business strategy and success.
Business Ethics
Safety
Safe and reliable operations
Excellence
Local Presence

CREATING SHARED VALUE PDF

Business Ethics

We have been active for several years now in fostering integrity in our business model. This commitment, in line with the standards of international best practices and well-suited to the complexity of our company’s structure, takes different forms and is addressed both to Saipem management, employees and supply chain.

Fighting corruption

  • more than 1,900 employees trained in business ethics training programmes in 19 countries

Social responsibility in the supply chain

  • ~100 audits carried out to gather information on vendors’ performance on major social responsibility issues since the beginning of the project.
  • more than 1,000 questionnaires analysed to assess specific vendor’s compliance with social and labour rights since the beginning of the project.

Safety

Being a global leader carries with it the duty to operate responsibly towards a number of stakeholders and towards society: the safety of our people, of local communities and of partners is a top priority for us. The explicit and clear commitment of our Company towards environmental and social sustainability has historically been an integral and important element of our business model.

Safety performance

Safety Performance

  • 1.08 TRIFR (Total Recordable Incident Frequency rate) in 2015, hence below the established target of 1.09. Overall TRIFR performance in 2015 improved by 1% compared to the 2014 result of 1.09. This data underscores the fact that the overall number of accidents has decreased.
  • 0.31 LTIFR (Lost Time Injury Frequency Rate), 0.28 in 2014

Spreading HSE culture

  • more than 1,100 LiHS events organised in 2015
  • The LiHS programme, the leadership development and cultural change programme developed by Saipem, has fostered a strong organisational safety culture by disseminating safe behaviours throughout the organisation since 2007.

Creating value through safety

During 2015, we proceeded with the ‘We Want Zero’ initiative with the aim of achieving the goal of zero accidents in the workplace and answering the question ‘What extra effort is required to achieve zero?’.

Creating Value

Safe and reliable operations

The pursuit of integrity in operations, meaning safeguarding people, partners, Company assets and the environment during the performance of our activities, is a top priority and a shared value among our people. We adopt and implement international principles and best practices to ensure safe and reliable operations.

Spill prevention

  • -90% spill volume in 2015 compared to 2014

We adopt a pollution prevention approach as a guiding principle for all of our activities, using our best efforts to prevent and take all reasonable precautions to avoid pollution or contamination of the land, air or water.

Oil Spill

Managing Human Factors

Significant improvement in safety performance could be achieved by taking better and more explicit account of the human factors discipline, considering the way people interact with every aspect of the workplace while also taking the personnel culture and local environment into consideration. Human Factors Engineering (HFE) focuses on the application of human factors knowledge for the design and construction of socio-technical systems, to ensure that systems optimise human contributions to production and minimise the potential for design-induced risks to health, personnel or process safety. We have developed specific processes and methodologies to control human factors engineering related risks.

Excellence

Innovation is one of the main pillars for meeting the competitive challenge. Capacity to innovate is in our DNA and is a key component of value generation.Read more...

Our in-house innovations brought and are still bringing significant added value to our current and future projects. The most recent innovations include: new and faster pipeline welding technologies, innovative laying and trenching technologies, innovative solutions for subsea field exploitation, innovative FLNG offloading systems, new drilling techniques for ultra-deepwater operations, innovative rigs for harsh/arctic operations; advanced solutions in the flagship urea synthesis process technology; worldwide recognised know-how and technological capability in very complex technologies.

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Main fleet vessel innovations

Normand Maximus

Normand Maximus is a new, top-class, offshore construction vessel.
This DP class 3 vessel is the result of an innovative design philosophy that couples SURF installation capabilities with ultra-deepwater field development activities. The vessels received the Clean Design Class Notation, achieving a 95% NOx emission reduction.

Saipem’s E&C flagship

We possess a strong, technologically advanced and highly versatile fleet, as well as world class engineering and project management expertise. These unique capabilities and competencies, together with a long-standing presence in strategic frontier markets, represent an industrial model that is particularly well suited to EPCI projects.
Discover more on Saipem’s main vessels

Saipem’s drilling flagship

At year-end 2015, our offshore drilling fleet consisted of 15 vessels: 7 deepwater units for operations at depths exceeding 1,000 metres (the drillships Saipem 10000 and Saipem 12000 and the semi-submersible drilling rigs Scarabeo 5, Scarabeo 6, Scarabeo 7, Scarabeo 8 and Scarabeo 9), 1 for mid water operations at depths of up to 500 metres (the semi-submersible Scarabeo 3), two high specification jack-ups for operations at depths of up to 375 feet/114 metres (Perro Negro 7 and Perro Negro 8), 4 standard jack-ups for activities at depths up to 300 feet/91 metres (Perro Negro 2, Perro Negro 3, Perro Negro 4 and Perro Negro 5) and one barge tender rig (TAD).
Discover more on Saipem’s main vessels

Technology for the SURF market

  • ‘Single independent riser’ technology: designed to improve fatigue behaviour and to extend the application range far beyond 3,000 m of water depth.
  • ‘Heat traced pipe-in-pipe’ for rigid J-Lay: extends the application of the most efficient active heating technology to larger diameter risers and flowlines, for even longer tie-back lines.
  • ‘Fusion bonded joint’ technique: enables the installation of plastic-lined pipes for highly corrosive fluids, instead of more expensive clad pipes and is an example of technology designed to reduce costs, an aspect of paramount importance especially in the current low oil price scenario.

Competent workforce

  • 1.64 mln training man-hours delivered
  • 3,589 skill evaluations completed
  • Within our commitment to having a competent workforce, the goal of the K-Factor project is to improve our Company’s ability to map, develop and monitor skills considered critical for ensuring the reliable development of operations.

Degree of role coverage*

Summary view of the population involved in the K-Factor

Competent Workforce

Local Presence

As an international company working in several countries all over the world, we are aware of the need for an effective Local Content strategy through employment and selection of vendors, and constructive interactions with local stakeholders to sustain their socio-economic development, to ensure the successful execution of projects and the long-term perspective of our business.

  • 80% (+1% compared to 2014) of our employees was employed locally, with the highest percentage in the Americas, the Middle East and Europe.
  • 68% (+12% compared to 2014) of total amount ordered for the operating projects was supplied by local vendors.

MODEL TO QUANTIFY OUR CONTRIBUTE TO SOCIO-ECONOMIC DEVELOPMENT IN HOSTING AREAS.

The ‘Human Capital Development’ model measures the direct economic effect of training (calculated as the costs of training in the country), the indirect effect (the increased lifetime earning expectancy associated with training), and the induced effect (calculated as the overall effect in the country of the increased earning expectancies, household consumption and taxes).
The results (click on the button below) show that in a country like Angola, each dollar invested by Saipem to train local employees has generated an additional 1.80 dollars in the Angolan economy. Similar ‘multiplier effects’ have been obtained for France, Brazil and Saudi Arabia, while for a country like Indonesia each dollar invested has generated an additional 13.70 dollars in the local economy, resulting in a total impact of 15 million USD spread over 5 years.
Similarly, the value generated in the local economy by Saipem’s activities and operations is calculated by considering the multiplier effect of each dollar introduced into the economy by Saipem through local spending, local wages and taxes paid.
In a country like Canada, each Canadian dollar introduced into the economy by Saipem has a total multiplier effect of 2.02, meaning that it has generated an additional 1.02 Canadian dollars (2011-2014). For Australia and France, the multiplier effect is between 2.10 and 1.90, respectively. Countries with less structured industrial contexts show a more reduced but nevertheless significant impact, with multipliers of 1.20 for Saudi Arabia, 1.33 for Kazakhstan and 1.32 for Angola.
Strengthening the competitive context in key regions where we operate is a way of contributing to the country’s growth, as well as to our effectiveness and productivity.
See the results

Saipem’s world
We operate in 70 countries and are present in almost every Oil & Gas market around the world. We play an active role in the local community, contributing to promote the socio-economic development of the areas where it operates.

Our business presence

Our local presence

Brazil
South America
Italy
Nigeria
Congo
Angola
Azerbaijan
Kazakhstan
Indonesia
Middle East
Brazil
1,527

Saipem’s employees

63%

of which are local

51%

of managers are local

SAIPEM PRESENCE:

  • Saipem do Brasil Serviçõs de Petroleo Ltda (SdB)
  • Prefabrication yard located in Guaruja
  • Centre for Technology and Construction Offshore (CTCO)
  • Rio de Janeiro engineering and project execution centre

 

SAIPEM’S ACTIVITIES:

  • Deepwater subsea fiel developments
  • Offshore deepwater pipelines
  • Sapinhoà Norte and Cernambi Sul subsea offshore development
  • Lula Norte, Lula Sul and Lula Extremo Sul pipelines and free standing hybrid risers (FSHRs)
  • Onshore rigs for Petrobras
  • ETBE (Ethyl tertiary butyl ether)

 

BUSINESS OUTLOOK:

The offshore basins in Brazil have a very high potential. Future opportunities will come also and mainly from further developments in the pre-salt area.

 

ON-THE-GROUND PRESENCE:

  • Initiatives addressed to employees. Several internal campaigns were carried out for our employees focusing on health, safety and environmental promotion and topics related to business ethics. 
  • Welcoming new employees. The Compagno programme makes the first few days of new employees easier at Saipem do Brasil. 
  • Promoting the well-being of local community. Many initiatives were carried out for local communities focusing on safety, environment and education. 
  • Share & Shape: a follow-up. The programme, started in 2014, invites young employees to share their ideas and projects with the aim of achieving continuous improvements in terms of Company process and work life. 
  • Strengthening local suppliers. A business meeting attended by 44 local suppliers to become familiar with the projects developed by our Company and the qualification process. 

Country factsheet

South America
3,659

people employed by Petrex

95%

of which are local

53%

of Petrex managers are local

SAIPEM PRESENCE:

  • Petrex SA

 

SAIPEM’S ACTIVITIES:

  • 37 operating rigs
  • Contract for construction and installation of a 160 km piping system for CODELCO (Corporación Nacional del Cobre de Chile)
  • Puerto Callao Muele Sur
  • Puerto Melchorita LNG
  • Porto Nuevo project

 

BUSINESS OUTLOOK:

Looking to the near future, opportunities may arise, particularly in the onshore downstream business (refining segment).

 

ON-THE-GROUND PRESENCE:

  • We Want Zero in Venezuela. A series of actions addressed to operational personnel and focusing on competence, awareness and responsibility were implemented.  
  • FamiLiHS: Saipem cares about its employees’ families. A workshop to extend the health and safety culture to 233 employees’ families. 
  • Introduction to drilling in Venezuela. 6 innovative workshops carried out to contribute to local growth, comply with Petrex’s standards, reduce the risk of accidents on temporary workers, and distribute the benefits of the Oil & Gas industry among the local population. 
  • Campaign for prevention and control of dengue in Peru. Petrex joined the Peruvian Ministry of Health to support the Campaign for Control and Prevention of Dengue fever in endemic areas of greatest risk in Talara, where 4,410 homes were inspected. 
  • Productive Unit for women in Colombia. Petrex encouraged women’s empowerment by sharing knowledge and tools to start new businesses in their communities. 
  • Promote recycling in Bolivia. 57 participants from employees’ families participated in a workshop on how to correctly recycle at home. 

Country factsheet

Italy
4,952

Total number of employees in italy

7,088

Total italian employees

26%

Percentage of female employees

SAIPEM PRESENCE:

Saipem (Società Azionaria Italiana Perforazioni E Montaggi) SpA is an Italian company that was founded in the 1950s. During the 1950s and 1960s, the Company acquired expertise in the onshore pipeline sector, construction of offshore and onshore rigs, and drilling. It initially operated as a division of Eni, before becoming an independent company in 1969.

 

SAIPEM’S ACTIVITIES:

  • Section of a high-speed railway line for Rete Ferroviaria Italiana Spa
  • Dismantling of the Costa Concordia
  • Construction of production line in relation to the Versalis-Ferrara IT EPC contract
  • Rigs deployment in the onshore drilling sector
  • FEED contract for engineering services on the SSV project

 

ON-THE-GROUND PRESENCE:

  • Saipem generates value in Italy. Goods and services purchased, wages and taxes paid, direct and indirect jobs generated are examples of how we fuels the Italian economy.  
  • Saipem and its suppliers. We are a catalyst for the growth and internationalisation of our Italian suppliers. In this framework, 6 testimonies were collected. 
  • Saipem, an Oil Spill Response service provider. A specialised Oil Spill Response Team (OSRT) provides technical support for the protection of the environment to prevent pollution caused by industrial activities. 
  • Fruitful relationship with local high schools. The ‘Sinergia’ programme develops concrete communication between educational institutions and the workplace and strengthens the technical capabilities of students. 
  • Italy loves safety – Italia loves sicurezza. An event to reaffirm our position as a global centre of safety knowledge, information and divulgation in the industry. 

Country factsheet

Nigeria
88%

of Saipem’s employees are local

60%

of managers are local

81%

of goods and services ordered locally

SAIPEM PRESENCE:

  • Saipem Contracting Nigeria

 

SAIPEM’S ACTIVITIES:

  • Escravos Gas to Liquids Complex for Chevron Nigeria Ltd
  • Southern Swamp (Associated Gas Solutions - SSAGS) project
  • Dangote Fertilizer project
  • Egina project
  • Bonga North West project
  • Okwori 22-26

 

BUSINESS OUTLOOK:

Nigeria is an important market for us. We are working on the promotion and development of Local Content with long-term investments, partnerships with local companies and maximisation of value in terms of local employment and procurement of material and services for projects executed in the country.

 

ON-THE-GROUND PRESENCE:

  • The MoU definition process. An attempt to commence work without the appropriate pre-entry community relations activities could result in a false start. A Memorandum of Understanding is essential in this regard.  
  • Community Youth Training. We promoted skill acquisition through a series of vocational skill training programmes for 100 youths in communities located in the vicinity of operations.
  • Industrial Training for undergraduates. An on-the-job training programme initiated by the Federal Government of Nigeria. 43 undergraduate students had a working experience in Saipem. 
  • HCD Programme. Through the Human Capital Development Programme we promoted local skills development by engaging a total number of 64 university graduates in project activities. 
  • Post Graduate Training Programme. The programme provided training for 5 university students through internship programme and workshops focused on Offshore Engineering. 
  • Commitment towards continuous improvement in subcontractor HSE standards. The HSE forum was addressed to 44 subcontractor representatives to raise awareness on quality, health, safety and environment issues. 
  • Corporate Social Responsibility Award. On the occasion of the 2015 IPLOCA Corporate Social Responsibility Award, we were named runner-up in recognition of our commitment to social responsibility with reference to the Women Empowerment Initiative. 

Country factsheet

Congo
426

Saipem’s employees

468

people hired through employment agencies

75%

of people working for Saipem are local

SAIPEM PRESENCE:

  • Boscongo SA
  • Saipem SpA Congo
  • Boscongo Fabrication Yard
  • Boscongo Marine Base

 

SAIPEM’S ACTIVITIES:

  • Litchendjili Onshore and Offshore Development project
  • MOHO North Offshore deepwater development project
  • Drilling offshore TAD (Tender Assisted Drilling)
  • PAPN (Port Autonome de Pointe-Noire)

 

BUSINESS OUTLOOK:

We are well equipped to compete in this country, in particular in the offshore and deepwater fields.

 

ON-THE-GROUND PRESENCE:

  • Fighting malaria. We launched a variety of initiatives to raise awareness of the disease and the need to tackle it. Community members, 82 employees and 600 subcontractors were involved. 
  • Boscongo’s internship programme. An internship programme for 9 students was launched to overcome the lack of apprenticeships in the local educational system. 
  • Opening of a documentation and information centre. The centre was created also to involve local students in several awareness courses. 
  • Promoting the wellbeing of local communities. The lack of water network emerged as one of the main problems of the communities of Côte-Matève; In this framework we built 2 water wells. 

Country factsheet

Angola
2,307

Saipem’s employees

62%

of which are local

44%

of managers are local

SAIPEM PRESENCE:

  • Saipem SA Angolan Branch
  • Saipem Luxembourg Angola Branches
  • Petromar Lda
  • Kwanda Lda
  • Sagio
  • TCPI
  • Deepwater Engineering and Technology
  • Ambriz Yard
  • Soyo Yard
  • Malongo (Cabinda) fabrication workshop

 

SAIPEM’S ACTIVITIES:

  • East Hub Development project
  • Kaombo FPSO project
  • Mafumeira Sul EPCI 2 Offshore Pipeline
  • Girri FPSO Modifications
  • Kizomba Satellites Phase 2
  • Congo River Crossin

 

BUSINESS OUTLOOK:

Numerous commercial opportunities, in particular in the offshore market.

 

ON-THE-GROUND PRESENCE:

  • Local Pool of LiHS Trainers in Angola. A structured process has created an Angolan pool of LiHS (Leadership in Health & Safety) trainers, which will support all Saipem companies, projects and vessels in the country.  
  • Fighting malaria. We are in line with the National Malaria Control Program and continued our malaria prevention programme in the country. 
  • Subcontractor workshop. In collaboration with local Chamber of Commerce, we organised a workshop to identify and sustain new potential local subcontractors. 120 subcontractors’ representatives attended the workshop. 
  • Increasing awareness on ethical business practices. The HOPE training programme raises awareness and encourages discussion in a specific socio-cultural environment, helps develop better management understanding of key Human Rights risks and issues for the Oil & Gas industry. 
  • Developing young talents. The Talentissimo programme represents an opportunity to attract students and develop their skills in the framework of the Oil&Gas industry. 58 students were selected for the programme. 
  • Saipem launched an agricultural development initiative. Alegria do Ambriz strengthened agricultural activities in the area to to contribute to the income of 25 families of local small farmers. 

Country factsheet

Azerbaijan
1,094

Saipem’s employees

51%

of which are local

82%

of goods and services ordered locally

SAIPEM PRESENCE:

  • Saipem Contracting Netherlands BV Azerbaijan Branch

 

SAIPEM’S ACTIVITIES:

  • Azeri-Chirag-Gunashili (ACG) oil field development project
  • Shah Deniz 2 (SD2) gas field project
  • South Caucasus Pipeline Expansion (SCPX) project

 

BUSINESS OUTLOOK:

Particular focus will be placed on the Downstream & Power Generation field. Azerbaijan is looking to diversify its natural resource-dependent economy. In the meanwhile, the country is moving forward with ambitious downstream projects, most notably in petrochemicals.

 

ON-THE-GROUND PRESENCE:

  • Young Graduates Internship Programme. Since its beginning, the initiative has provided a mechanism that has allowed 120 students to benefit from trainings and on-the-job experience during internships prior to their formal entry in the labour market. 
  • Improving skills of local medical personnel. We implemented a professional training course for 9 local doctors working for Saipem offshore projects. 
  • Promoting Local Content in operating projects. Public meetings were organised to involve and inform local communities of project status and job opportunities. 
  • Protecting biodiversity. The SCPX pipeline route passes through impact-sensitive areas. As part of our commitment towards ecosystems, habitats and species protection, we transplanted more than 360 flowering Iris Acutiloba
  • Spill prevention and preparedness in sensitive areas To preserve the Caspian Sea and ensure long-term and sustainable operations, Shah Deniz 2 project recognised spill prevention as one of the main environmental objectives and pollution hazard maps for all worksites were developed. 

Country factsheet

Kazakhstan
3,268

Saipem’s employees

64%

of which are local

670

framework agreements signed

SAIPEM PRESENCE:

  • Ersai Caspian Contractor Llc
  • Saipem SpA Kazakhstan Branch
  • Saipar Drilling Co

 

SAIPEM’S ACTIVITIES:

  • Kashagan Field Development project
  • Karachaganak field, drilling/workover operations in Uralsk and Aktobe provinces, and decommissioning and transportation of Client rigs
  • EPC of a jack-up drilling rig

 

BUSINESS OUTLOOK:

Thanks to our specific experience in Kazakhstan in offshore and onshore activities, and based on our competitive advantages due to the Local Content strategies, we are in a position to manage future business opportunities in the country.

 

ON-THE-GROUND PRESENCE:

  • Ersai Scholarship Programme. We supported students from needy families by financing their studies at one of the State Universities of Kazakhstan in the specialisations required by the Company. 
  • Boosting entrepreneurial potential. The project ‘Boosting Entrepreneurship Potential in Kuryk’ was designed to address the unemployment challenges in Mangystau Oblast by focusing both on business and handicrafts development component. 
  • Pre-school education initiative. A tailored Montessori programme was designed for 24 Kuryk caretakers to improve their professional qualifications, strengthen parent-kindergarten partnerships, and increase community engagement in the education of young children. 
  • School Education Development project. The programme involved 55 elementary teachers trained in innovative teaching methodologies for Maths, History and the Kazakh language. 
  • Fostering local manpower in maritime industry. The 4-year Marine Training initiative fosters professional manpower for operations in the maritime industry. In 2015 the first 8 cadets sponsored by Saipem successfully graduated. 

Country factsheet

Indonesia
3,584

Saipem’s employees

83%

of which are local

87%

of goods and services ordered locally

SAIPEM PRESENCE:

  • PT Saipem Indonesia (PTSI)
  • Saipem Karimun Fabrication Yard

 

SAIPEM’S ACTIVITIES:

  • Jangkrik FPU EPCI
  • Jangkrik FPU Drilling
  • Tangguh LNG Onshore FEED

 

BUSINESS OUTLOOK:

We are currently exploring all available opportunities for 2016, focusing our main efforts on tenders related to gas field development. Other opportunities can be found in gas monetisation. In the offshore business, the area of the Abadi Field constitutes an opportunity for the development of FLNG and subsea projects.

 

ON-THE-GROUND PRESENCE:

  • Emergency management capacities of Karimun Hospital. An MoU was signed with the Regency of Karimun to improve the emergency management capacities of the local hospital. 
  • Health care for local women. We supported the new Community Health Post located in West Pangke Village. The Health Post is targeted at mothers, their children and elderly women, and provides health assistance and awareness on certain topics. 
  • Sanitation system improvement in schools. We improved the Pangke Village Elementary School sanitation system to better meet pupil needs. 
  • Introducing children to safety and environment protection. The Little-LiHSE initiative was addressed to 231 employee children to develop awareness on safety and environmental protection. 
  • Promoting local employment and skills development. We conducted a recruitment and training campaign in the Karimun regency and in other Indonesian regions. 
  • A responsible company in an urban environment. Two initiatives carried out to support the national educational system: the first one focusing on capability building and the second on improving school infrastructures. 
  • Scouting young talents. The Young Engineer Sustainable Development Programme in Jakarta involved 13 young engineers. 
  • Human Factor Engineering on Saipem Indonesia projects. We applied Human Factor Engineering Work Instruction, demonstrating our commitment to creating a comfortable working and living environment, facilitating the development of a healthy workplace culture, and protecting the health and safety of personnel. 

Country factsheet

Middle East
8,779

Saipem’s employees

83%

of which are local

848

framework agreements signed

SAIPEM PRESENCE:

  • Saudi Arabia
  • Qatar
  • Kuwait
  • UAE
  • Oman
  • Iran
  • Iraq

 

SAIPEM’S ACTIVITIES:

  • Jazan Integrated Gasification Combined Cycle (JIGCC) project
  • Khurais Expansion project
  • Rabigh Phase II project
  • Al Wasit Gas Programme
  • Saudi Aramco Karan
  • Al Zour New Refinery project (NRP) - Packages 4 and 5

 

BUSINESS OUTLOOK:

The abundance of reserves and a growth in oil consumption that is below expectations mainly support the downstream segment, especially in Saudi Arabia and in Iran. Oman and Qatar plan to invest in the infrastructure in which we have significant experience. Qatar will also invest in offshore gas production systems, as well as in the downstream field where we have an excellent track record.

 

ON-THE-GROUND PRESENCE:

  • A sustainable supply chain in the Middle East. Bahrain and Saudi Arabia were included in the Social Responsibility Campaign for the first time in 2015 and 2 vendors were involved and audited on social responsibility issues. 
  • A Saudi-focused sustainability charter. We organised a Sustainability Strategy Workshop in Saudi Arabia to define strategy and key areas of intervention appropriate to that specific context. 
  • Working with subcontractors to guarantee safe operations. The HSE forum was addressed to 17 subcontractors’ representatives to raise awareness on quality, health, safety and environment issues. 
  • Saipem’s training hub in the Middle East. The Saipem Sharjah Training Centre caters employee training needs by delivering top-class courses, while being the epicentre of training excellence inside and outside the Middle East region. 
  • Shah-Habshan-Ruwais Etihad: infrastructure project of the year. The scale and complexity of this project was immense and we also set a new world record during the construction. 

Country factsheet

Saipem S.p.A. - Via Martiri di Cefalonia, 67 20097 San Donato Milanese (MI) Italy. Corporate capital 2,191,384,693 € fully paid-up.
Economic and Administrative Business Register Milan no. 788744 Taxpayer's code and VAT number 00825790157.