Saipem eyes Venezuela return as U.S. relaxes sanctions

The Italy[Country:{"assets":{"country":"IT"}}]-based energy services provider Saipem S.p.A.[Symbol:{"assets":{"symbol":"SPM.MI"}}] has announced its readiness to resume operations in Venezuela[Country:{"assets":{"country":"VE"}}] following the recent easing of sanctions by the United States[Country:{"assets":{"country":"US"}}]. Chief Executive Alessandro Puliti indicated on Wednesday that the company anticipates a surge in demand from major oil producers later this year. > "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 stated during a post-results call. The shift follows a decision by the U.S. Treasury Department’s Office of Foreign Assets Control to issue general licenses allowing global energy firms to operate within the OPEC member nation. This regulatory relaxation has opened doors for companies such as Chevron Corporation[Symbol:{"assets":{"symbol":"CVX"}}], Eni S.p.A.[Symbol:{"assets":{"symbol":"ENI.DE"}}], Shell plc[Symbol:{"assets":{"symbol":"SHEL"}}], and Repsol, S.A.[Symbol:{"assets":{"symbol":"REP.DE"}}], all of whom maintain a presence in the country through partnerships with the state-run PDVSA. While no formal requests for tenders or engineering studies have been received yet, Puliti expects activity to pick up in the coming months as international oil companies finalize their investment plans for the region. Despite the country's vast oil reserves, any returning contractor will need to address a significantly dilapidated energy infrastructure. Beyond Latin America, Saipem is also making progress in Mozambique[Country:{"assets":{"country":"MZ"}}]. The company is currently collaborating with TotalEnergies SE[Symbol:{"assets":{"symbol":"TTE"}}], headquartered in France[Country:{"assets":{"country":"FR"}}], to review orders for a $20 billion liquefied natural gas (LNG) project. This project is nearing a restart after a prolonged suspension. Puliti noted that the process of revisiting purchase orders and subcontracts to account for cost escalations is ongoing and is expected to continue past the first quarter. On the corporate front, Saipem remains on track to finalize its merger with Norway[Country:{"assets":{"country":"NO"}}]-based SUBSEA 7 SA[Symbol:{"assets":{"symbol":"SOC.F"}}] during the second half of the year. The company also provided an optimistic financial outlook, projecting adjusted core earnings to reach approximately 1.9 billion euros ($2.2 billion) this year, from 1.7 billion euros in 2025.