Offshore Technology

Daily Newsletter

08 August 2023

Daily Newsletter

Aker, SLB and Subsea7 secure approval for subsea joint venture

The parties will now seek to fulfil the last-minute closing requirements to complete the process in the fourth quarter of 2023.

Oilfield services companies Aker Solutions, SLB (formerly Schlumberger) and Subsea7 have received approval from competition authorities for their proposed subsea joint venture (JV).

The JV, which was announced last August, will see the companies bring together their subsea businesses.

This includes deep reservoir domain and engineering design experience, field-proven subsea production and processing technology portfolios, manufacturing scale and capabilities, and a full range of life-of-field solutions.

In a statement, Aker said that all regulatory permissions and clearances, including those needed in Angola, Australia, Brazil, Mozambique, Norway, the UK, and the US, have been secured.

“The joint venture is planned as a milestone in subsea production economics, helping customers unlock reserves, reduce time to first oil, lower development costs and achieve decarbonisation goals,” Aker noted, adding that all the approvals and clearances obtained were unconditional.

The parties will now seek to fulfil the last-minute closing requirements to complete the process in the fourth quarter of 2023.

Upon completion, SLB will control a 70% stake in the JV, and Aker and Subsea 7 will own the remaining 20% and 10% stake, respectively.

Globally, the combined entity will employ around 9,000 people.

As per the terms of the initial agreement, at closing Aker will receive $306.5m (€279.4m) in shares from SLB, $306.5m in cash from Subsea 7 and a promissory note from the JV worth $87.5m.

At the time of the announcement of the JV, SLB CEO Olivier Le Peuch said: “As investment in the offshore market – particularly in deepwater – continues to increase, our customers will benefit from enhanced services that leverage digital and technological innovation to drive improved subsea asset performance while increasing energy efficiency and reducing CO₂ emissions.”

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.