Oil & gas work ‘key revenue driver’ for DeepOcean, with offshore wind outlook positive

Oslo-headquartered ocean services provider DeepOcean has reported a revenue increase of 13.4 per cent in 2022 said to be mainly driven by inspection, maintenance and repair (IMR) work in the oil and gas sector.

For 2022, DeepOcean reported revenue of $566.1 million, up 13.4 per cent from $499.4 million in the prior year, and an operating profit (EBIT) of $65.8 million, a significant improvement from $49.9 million in 2021.

The Norwegian company stated that it had experienced strong growth in Europe and record high activity in North America, while the African business saw a decline in revenue, but is expected to grow substantially as a “significant amount” of offshore work has been secured for this year.

Within oil and gas, subsea IMR work is said to have been the main revenue driver, which doubled its operating revenue from the removal and recycling of old subsea infrastructure.

“We delivered a solid 2022 where the important financial KPIs pointed in the right direction. IMR work in the offshore energy industries remains the key revenue driver, but income from removal and recycling of offshore infrastructure is proportionally growing the most,” said Frode Garlid, CFO of DeepOcean Group.

Within renewable energy, DeepOcean saw an increase in work during 2022 as it supported offshore wind operators in Europe and the U.S.

“The growth in offshore wind developments has progressed slightly slower than expected. This is partially due to replacement effects, where ‘energy security’ work has taken precedence, but also and maybe more importantly, we still see a supply chain imbalance within the offshore renewables market,” said Øyvind Mikaelsen, DeepOcean’s CEO.

“However, the long-term outlook is positive and our message to developers and operators is that we have the competence and assets, including our remote operations offering, to support them.”

Throughout 2022, DeepOcean received new orders worth a total of $705.7 million, up from $556.7 million in 2021. At year-end 2022, the company’s order backlog stood at $411.7 million, versus $272 million one year prior.

At the end of February 2023, the order backlog had grown to $498 million following several project wins, including contracts to support Equinor on the Irpa and Verdande field developments on the Norwegian continental shelf (NCS).

“Our strategy to diversify into more offshore energy segments and other ocean-based industries has proven successful. Today’s DeepOcean is much less vulnerable to sector-specific fluctuations and our order backlog is very high, which together with attractive frame agreements provides excellent visibility for the coming years. We look forward to 2023 and the coming years,” Mikaelsen concluded.

Last year, DeepOcean established two joint ventures – Remota AS and USV AS – together with Solstad Offshore and Østensjø to accelerate the use of remotely controlled operations offshore, as well as acquired Norwegian Installit which specializes in subsea cables.

The Oslo-headquartered firm also entered into a strategic partnership agreement with Aker BP under which it is the preferred supplier of subsea services for the next few years and developed an autonomous inspection drone which is currently carrying out its first offshore operations.

To conclude, DeepOcean stated it will maintain its vessel light strategy and continue to modernize its fleet by collaborating with shipowners that are willing to invest in emission reductions, including the installation of battery hybrid systems. As a consequence, CO2 emissions from the company’s operations have been reduced by 16 per cent since 2020.