Chat with this content: Summary, Analysis, News...
Share on Reddit
Saipem: From Mattei's Vision to Offshore Giant – Engineering Italy's Energy Empire
I. Introduction: The Rebirth of a National Champion
In the austere boardrooms of San Donato Milanese on a winter morning in January 2022, a bombshell detonated across European financial markets. Saipem S.p.A., one of Italy's most storied industrial champions, issued a profit warning that would send its shares plunging 32% in a single day—their largest intraday drop since 2013. The company that had laid the world's longest subsea pipelines, that had pioneered deepwater drilling in waters where no one dared venture, that carried the DNA of Italy's most legendary business figure, was suddenly fighting for survival.
Saipem S.p.A. (Società Azionaria Italiana Perforazioni E Montaggi—"Drilling and Assembly Italian Public Limited Company") is an Italian multinational oilfield services company and one of the largest in the world. Today, Saipem operates as "One Company" organized into business lines: Asset Based Services, Drilling, Energy Carriers, Offshore Wind, and Sustainable Infrastructures. The company has seven fabrication yards, an offshore fleet of 21 construction vessels (of which 17 are owned and four are owned by third parties and managed by Saipem), and 15 drilling rigs (of which nine are owned). It maintains a presence in more than 50 countries and employs approximately 30,000 people of over 130 nationalities.
The central question of Saipem's story is both compelling and instructive: How did a subsidiary created by Italy's legendary oil baron Enrico Mattei become one of the world's premier offshore engineering giants—surviving near-bankruptcy, corruption scandals, and oil price collapses—and now stands on the verge of a transformative mega-merger?
The answer requires understanding three interconnected threads: the unique role of Italian industrial policy in shaping a national champion, the brutal economics of the oilfield services business model where fixed-price contracts can turn billion-dollar backlogs into existential threats overnight, and the relentless rollercoaster of energy cycles that determines whether offshore contractors feast or starve.
This is a story that spans nearly seven decades, from the bombed-out factories of post-war Italy to the frigid depths of the Black Sea, from the contested deserts of Algeria to the storm-tossed waters of the North Sea. It features larger-than-life characters, mysterious deaths, diplomatic showdowns with oil majors, and one of the most remarkable corporate turnarounds in recent European industrial history.
II. The Mattei Era: ENI, Italian Energy Independence & The Birth of Saipem (1945–1962)
The Most Powerful Italian Since Caesar
In the rubble of post-war Italy, a former resistance fighter received an unusual assignment. Enrico Mattei (29 April 1906 – 27 October 1962) was an Italian public administrator. After World War II, he was given the task of dismantling the Italian petroleum agency Agip, a state enterprise established by Fascist Italy. His instructions were clear: liquidate the company and sell its assets to private interests, including the dominant foreign oil companies.
What happened next would reshape Italy's post-war trajectory. Instead, Mattei enlarged and reorganized it into the National Fuel Trust (Ente Nazionale Idrocarburi, ENI). Under his direction, ENI negotiated important oil concessions in the Middle East as well as a significant trade agreement with the Soviet Union, which helped break the oligopoly of the "Seven Sisters" that dominated the mid-20th-century oil industry.
Mattei coined the term "Seven Sisters" (sette sorelle) to refer to the dominant oil companies of the mid-20th century. These were Exxon, Mobil, Chevron, Gulf, Texaco, BP, and Shell—the Anglo-American cartel that controlled access to oil reserves worldwide and set prices as they pleased. For resource-poor Italy, still suffering from wartime devastation, this cartel represented an existential vulnerability.
The Defiant Discovery
In 1949, Mattei made an audacious gamble. He made an astonishing public announcement: the soil of the Po Valley in Northern Italy was rich in oil and methane, and Italy would solve all its energy needs using its own resources. Through the Italian press, he then encouraged the idea that the nation would soon become rich.
The reality was more nuanced. In the territory of Cortemaggiore, in the Valley of Po, a certain amount of methane had been found together with a small quantity of oil. Mattei's strategy was to use natural gas to support the development of a national industry in Northern Italy, sustaining the postwar boom known as the Italian economic miracle.
The announcement was as much psychological warfare as corporate strategy. Agip's financial value immediately grew in the stock exchanges, and the company (owned by the state but operating as a private company) became at once solid and important.
Building the Empire
Eni was founded in 1953 by an existing company, Agip, which was created in 1926 with the aim to explore for oilfields, and acquire and commercialize oil and derivatives. In March 1953, Enrico Mattei was nominated Eni's chairman.
Under Mattei's leadership, ENI played a crucial role in the "Italian economic miracle" (1959–1963), establishing itself in the ultra-strategic hydrocarbons market. The New York Times described him as the most powerful Italian since Julius Caesar.
Mattei's signature innovation was what became known as the "Mattei Formula." Instead of the traditional 50-50 division of profits, Mattei negotiated new arrangements in which the host country received 50 percent of the partnership's profits and then had the option of joining in the production costs and taking half of the remaining 50 percent. This so-called 75-25 formula was seen as a direct challenge to the arrangements usually negotiated by the major oil companies.
The Birth of Saipem
The history of Saipem is deeply connected to Enrico Mattei's management era of Eni during the years of the Italian economic miracle. In the early 1950s Mattei had reorganized the Italian oil industry through a complex system of outright acquisitions and government investments, in order to guarantee Italy's self-reliance in energy. At first, Mattei focused on natural gas, the only abundant source of energy available in mainland Italy, through Snam, a newly formed gas pipelines company.
The need for specialized construction capabilities led to corporate innovation. In the late 1950s, Eni's subsidiary Snam came to head two sub-holdings: Snam Montaggi, created in 1955 to build pipelines and drilling platforms, and Snam Progetti, created in 1956, specializing in tankers. In 1957 drilling company Saip, a subsidiary of Agip (Eni's fuel retailer), was merged with Snam Montaggi to create Saipem.
In 1957, when the newly independent company was established, Eni held complete control, owning 100% of its equity. This arrangement was designed to give Eni specialized engineering and construction services for its ambitious energy projects. That same year, Saipem constructed its first offshore platform—"Scarabeo"—a true wonder of engineering skills for its era.
The Mysterious End
On 27 October 1962, Enrico Mattei's airplane mysteriously exploded near Bascapè, on his way to Milan from Catania. His death was initially considered an accident, but later it was confirmed to be a murder with the aim of protecting and hiding important economic and political interests in Italy and especially abroad.
Mattei was just 56 years old when he died. Through Mattei, Eni also negotiated oil concessions in France, Africa, and Spain, as well as an agreement to import large quantities of crude oil from the Soviet Union in exchange for exports of manufactured goods. Mattei was killed in a crash of his private jet on a flight from Catania, Sicily, to Milan. Conspiracy theories surrounding his death have been the subject of numerous magazine articles, books, television docudramas, and a major film.
He left behind a sprawling corporate empire whose strategy had been Mattei's vision and opportunism, and whose integrating force had been his charisma and personal decision-making authority. The companies he created—including the nascent Saipem—would have to find their own path forward.
For investors today, the Mattei era established something crucial: Saipem was never simply a private commercial enterprise. It was, from birth, an instrument of Italian state industrial policy, with all the advantages (patient capital, government contracts, diplomatic support) and disadvantages (political interference, corruption risk, unclear commercial priorities) that implies. That dual nature—commercial actor and national champion—persists to this day, with the Italian state still holding substantial influence through Eni and CDP Equity.
III. Pioneer Years: Building Europe's Offshore Infrastructure (1959–1980s)
First Steps into the Deep
Saipem was a pioneer in offshore drilling and pipelines construction in Europe; in 1959 it started drilling oil off the coast of Gela, in Sicily and in the early 1960s initiated the Central European Line pipeline, running from the port of Genoa to West Germany, where Eni Deutschland subsidiary was building refineries in Ingolstadt.
These were the company's formative years, when engineers and workers learned their craft in the unforgiving environment of open water. The Sicily operations proved that Italian companies could master offshore technology—a capability that had previously been the preserve of American and British firms with North Sea experience.
International Expansion
By the early 1960s, Saipem had developed enough capability to export its expertise. In addition, in 1961 Saipem built a 1,140 km long oil pipeline in India and a gas pipeline in Iraq. These projects established a pattern that would define Saipem's strategy for decades: follow Italian diplomatic initiatives into developing countries where Mattei's formula had opened doors, then leverage that experience to bid on contracts worldwide.
From then on, the company's international reputation continued to grow. By 1969, Saipem had completed remarkable works, including 600 wells in Mesota Espinosa, various gas and oil pipelines in Argentina, India and Italy, and four drilling platforms in the Adriatic Sea.
The 1970s Oil Crisis Era
The Arab oil embargo of 1973 transformed the economics of the global energy industry overnight. Oil prices quadrupled, creating massive new incentives for exploration and production in non-OPEC regions. For offshore contractors like Saipem, this was both opportunity and crisis—opportunity because of surging demand for their services, crisis because inflation and supply chain disruptions made project execution treacherous.
In 1978, Saipem laid down Castoro Sei, a column stabilized semi-submersible pipelay vessel. In the same year Saipem was commissioned the construction of IGAT-2 pipeline in Iran. About 80 per cent of the line had been completed by 1985, when the works had to be halted because of the Iran-Iraq war.
The Iran project illustrates the geopolitical risks embedded in Saipem's business model. The company had committed massive resources—equipment, personnel, organizational capacity—to a multi-year project in a region where political stability was never guaranteed. When war erupted, those investments became stranded assets.
The Trans-Mediterranean Breakthrough
In 1983, Saipem completed the construction of the massive Trans-Mediterranean Pipeline, linking Algeria to Italy. This project was a watershed—both technically and strategically. Spanning hundreds of kilometers across the Mediterranean seabed, it demonstrated that Saipem could execute mega-projects that defined the state of the art.
The pipeline also cemented the relationship between Italian industrial policy and North African energy. Italy would import Algerian gas; Algeria would receive Italian technology and investment. Saipem sat at the nexus of this relationship—a position that would later prove both lucrative and legally dangerous.
The Trans-Mediterranean Pipeline was later renamed after Enrico Mattei, the man whose vision had made it all possible. In 2000, the Trans-Mediterranean Pipeline, a natural gas pipeline from Algeria via Tunisia to Sicily and thence to mainland Italy, was named after Mattei.
For long-term investors, the 1970s and 1980s established Saipem's core competitive strengths: technical capability in challenging deepwater environments, a specialized fleet of vessels that represented high barriers to entry, and relationships with national oil companies in regions where Western majors faced political obstacles. These strengths remain the foundation of Saipem's value proposition today.
IV. Going Public & Global Consolidation (1984–2000)
The IPO: From State Subsidiary to Public Company
In the 1980s, Saipem took a transformative step. In 1984, the company was listed on the stock exchanges in Milan and Paris, prompting interest from international investors. At this point, Saipem had become global in size and importance—but the listing also created new pressures. Public shareholders expected returns; they demanded transparency; they had no patience for the strategic ambiguities of serving simultaneously as commercial actor and instrument of state policy.
Joint Ventures and the North Sea
To continue its ambitious development, the company began building strategic alliances through joint ventures with competitors that would strengthen its position in the North Sea, a key area for extraction and new technologies.
In 1988, a joint venture between Saipem and Brown & Root was formed, known as European Marine Contractors, that realized two major projects: Zeepipe, completed in 1993, a 1,416 km natural gas transportation system to transport North Sea natural gas to the receiving terminal at Zeebrugge in Belgium; and a 707 km trunkline connecting Hong Kong with Yancheng 13-1 gasfield, located in the Yinggehai Basin, completed in 1994.
These joint ventures reflected a pragmatic strategy: rather than compete head-to-head with American giants in their home markets, Saipem would partner, learn, and position itself for the next wave of projects.
The Saipem 7000: A Statement of Ambition
In 1991, Saipem started operating Saipem 7000, the world's second biggest crane vessel. This was not merely an asset purchase—it was a declaration of intent. The Saipem 7000, with its massive dual cranes capable of lifting thousands of tons, could install platforms and structures that few competitors could handle. Such vessels cost hundreds of millions of dollars and take years to build; owning one created an enduring competitive moat.
Strategic Acquisitions
The company also moved aggressively on acquisitions. In 1992, Saipem acquired Micoperi's fleet to consolidate its position in heavy transport, followed by Sonsub to develop its knowledge of subsea operations. Each acquisition added capability—heavy lift, remotely operated vehicles, deepwater intervention—that expanded Saipem's service offering.
European Pipeline Leadership
In 1996, the Maghreb–Europe Gas Pipeline linked Algerian gasfields to Spain. In 1995-1999, Saipem was the main contractor for the construction of Europipe I and Europipe II natural gas pipelines, connecting Norway to Germany.
By the end of the 1990s, Saipem had positioned itself as the dominant contractor for European energy infrastructure. Norwegian gas to Germany. Algerian gas to Italy and Spain. North Sea production systems. The company's technical capability was beyond dispute; its order book was robust; its relationships with national oil companies and major utilities were deep.
What investors didn't fully appreciate was the risk accumulating on the balance sheet. Fixed-price EPC (Engineering, Procurement, Construction) contracts offered high margins when things went well—but catastrophic losses when they didn't. Cost overruns, schedule delays, unexpected technical challenges: all ate directly into contractor profits. This asymmetric risk profile would come back to haunt Saipem—repeatedly.
V. 21st Century Transformation: Acquisitions & Becoming a Full-Service Giant (2001–2012)
The Bouygues Offshore Acquisition
As the new millennium began, Saipem accelerated its transformation through acquisitions. In the 21st century, Saipem carried on a number of acquisitions, culminating in the purchase of Bouygues Offshore for $1 billion in 2002.
The Bouygues deal was particularly significant because it brought French expertise and established Saipem's presence in Saint-Quentin-en-Yvelines, France—a location that remains the headquarters of key competence centers today. The acquisition reflected a broader industry trend: consolidation among offshore contractors as projects grew larger, more complex, and more capital-intensive.
The Snamprogetti Merger: Creating an Integrated Giant
In 2006 Saipem merged with Snamprogetti, a subsidiary of Eni specializing in the design and execution of large scale offshore projects for the production and transportation of hydrocarbons. Through the merger, the new group strengthened its position in West Africa, Middle East, Central Asia, and South East Asia and acquired significant technological competence in gas monetization and heavy oil exploitation.
Eni purchased 100% of the equity of Snamprogetti for €680m in cash; the closing of the transaction took place by March 31, 2006. Snamprogetti was one of the leading engineering and construction companies, active in the international market for the design and execution of large scale onshore plants for the production and treatment of hydrocarbons and the monetization of natural gas. Saipem was a leading company in the design and execution of large scale offshore projects for the production and transportation of hydrocarbons, and had distinctive construction capabilities for the realization of onshore projects.
The merger created one of the world's largest engineering, procurement and construction contractors for the oil and gas industry. The integration of Saipem and Snamprogetti was uniquely facilitated by the strong industrial relationships developed on many common endeavors, by a natural affinity and culture deriving from common roots within the Eni Group, and the sharing of the same information systems. The capabilities of the two companies were both highly complementary and strongly synergistic.
Landmark Projects: Blue Stream and Beyond
In 2001-2003, Saipem built the offshore section of Blue Stream, a major trans-Black Sea gas pipeline that carries natural gas from Russia into Turkey. In 2003-2004, Saipem built the Greenstream pipeline, connecting Libya to Sicily. In 2006, Saipem completed the sealines of the Dolphin Gas Project, connecting Qatar's North Field to the United Arab Emirates and Oman.
Blue Stream was particularly significant as a testing ground. Working at depths of nearly 2,200 meters had never been done before at this scale. The project pushed the boundaries of what was technically possible—and Saipem delivered.
Fleet Modernization: The Scarabeo Generation
In 2006-2008, Saipem laid down Scarabeo 8 and Scarabeo 9 ultra deepwater 6th generation semi-submersible drilling rigs, completed in 2011–12. These weren't incremental upgrades—they were state-of-the-art assets capable of operating in the harshest deepwater environments.
Nord Stream: The World's Longest Subsea Pipeline
In 2011, Saipem completed the two 1,220 km gas sealines of Nord Stream 1, a system of offshore natural gas pipelines from Russia to Germany and the longest in the world.
The design engineering of the subsea pipeline was done by Snamprogetti (now part of Saipem) and the pipeline was constructed by Saipem. Saipem subcontracted Allseas to lay more than 25% of both pipelines.
Saipem's Castoro Sei laid about 70 percent or 853.5 kilometres of each of the two pipelines. It started working in April 2010, and finished work on Line 1 in May 2011. The Castoro Sei began work on Line 2 in June 2011 and finished in April 2012.
Nord Stream represented the pinnacle of Saipem's technical achievement—and also its entanglement in geopolitical controversies that would only intensify in subsequent years. The pipeline became operational in November 2011, inaugurated by German Chancellor Angela Merkel, Russian President Dmitry Medvedev, and other European leaders.
By 2012, Saipem had transformed from a regional Italian contractor into a global offshore engineering giant. Revenue had grown dramatically; the backlog stretched years into the future; the fleet was among the most capable in the industry. But storm clouds were gathering. The same Algeria where Saipem had built its reputation was about to become the source of its greatest legal crisis.
VI. The Crisis Years: Corruption Scandals & Profit Warnings (2013–2016)
The Nigerian Bribery Settlement
In 2010, Saipem agreed to pay a penalty of US$30 million to settle a Nigerian investigation into a bribery case involving the construction of Nigeria LNG facilities. This was an early warning sign—a signal that the company's aggressive growth had not been accompanied by equally robust compliance systems.
The Algeria Corruption Scandal Erupts
The Algeria affair became the defining crisis of this era. According to witnesses later interviewed by Italian prosecutors, the agenda at meetings at Milan's Hotel Bulgari was to arrange $275 million in bribes to help the energy company win more than $10 billion in contracts to build oil and gas pipelines from the North African desert to the shores of the Mediterranean.
To conceal the payments, Saipem entered into four sham contracts with an intermediary with little due diligence and paid it over €198 million (approximately US$215.2 million) without actual services rendered. Saipem mischaracterized the payments as legitimate fees and obtained at least seven contracts from the Algerian state-owned oil company.
The intermediary involved, Farid Bedjaoui, earned the nickname "Mr. 3%" after investigators found that percentage scrawled on hotel stationery during a raid—allegedly his standard cut.
How perfunctory was Saipem's due diligence of the intermediary? Saipem's legal department conducted a pre-review of the sham contracts prior to anyone signing them, but those contracts had no names included—not even the name of the intermediary arranging the payments. "Accordingly, Saipem's legal department did not conduct any review of the intermediary's business or reputation," the SEC settlement said.
Legal Proceedings and Convictions
In September 2018, an Italian court found Saipem and former CEO Pietro Tali guilty of corruption over bribes in Algeria. The former CEO was sentenced to four years and nine months in prison and 197.9 million euros were seized from the company.
However, the legal saga continued. In 2018, an Italian court found Saipem, Bernini and others guilty of corruption and ordered Saipem to forfeit 198 million euros. The court acquitted Eni, its former chief executive and another senior executive. In January 2020, the Milan Court of Appeals overturned the guilty verdicts.
The Italian judiciary authority—further to criminal proceedings in which also the process of award of the GK3 project in 2009 had been analysed—fully acquitted the company on December 14, 2020.
The 2013-2016 Financial Crisis
Beyond the corruption scandal, Saipem faced a cascade of operational problems. The company's troubles began as far back as 2013 when it got caught up in corruption proceedings in Algeria and then issued a series of profit warnings relating to margins on contracts.
The fundamental problem was the structure of fixed-price EPC contracts. When oil prices collapsed from over $100 per barrel in 2014 to below $30 in early 2016, the entire offshore services industry entered crisis. Projects were cancelled or delayed; day rates for drilling rigs collapsed; contractors found themselves locked into contracts bid during boom times but executed during bust.
The 2016 Capital Increase and ENI Separation
In 2016, Saipem needed a €3.5 billion capital increase to survive. In 2016, Eni sold a 12.5% stake in Saipem (retaining a 30% share though), that was acquired by CDP Equity, and subsequently allowed Saipem to scrap the old Eni logo and design its own, with the objective of creating a new, more autonomous company focusing on oilfield services.
Until 2016 it was a subsidiary of Italian oil and gas supermajor Eni, which retains approximately 30% of Saipem's shares. The partial separation from Eni was meant to create a more focused, commercially-driven company. But Eni remained the largest shareholder, and the state's influence—now exercised through both Eni and CDP—was unchanged.
For investors, the 2013-2016 period demonstrated the governance weaknesses embedded in Saipem's state-adjacent ownership structure. When corruption scandals and operational failures demanded accountability, the murky relationship between commercial management, parent company oversight, and state interests made it difficult to identify who was responsible—or to implement reforms that might prevent recurrence.
VII. The 2022 Near-Death Experience
The Shock Profit Warning
Five years after the 2016 rescue, history repeated itself—with even more devastating market impact. In late January 2022, Saipem issued a profit warning that stunned investors. The company stunned investors in January when it downgraded earnings by a billion euros due to a significant deterioration of margins on contracts including offshore wind. The downgrade came just three months after Chief Executive Francesco Caio had presented the group's business plan.
The company revised its outlook dramatically, projecting consolidated adjusted EBITDA for the second half of 2021 down by approximately €1 billion. The share price cratered to levels not seen since 1992.
Root Causes: Offshore Wind and Legacy Contracts
Oil and gas contractor Saipem confirmed a €580 million downgrade in profits for 2021 due to difficulties with offshore wind farms. It had previously issued a profit warning, citing delays in critical supplies and revised estimates of execution times and costs for offshore wind.
The Italian company also blamed an impact on onshore oil and gas engineering and construction projects, and confirmed that this had hit profits by approximately €440 million. Overall, it recorded a loss of €1.2 billion in 2021, compared to adjusted Ebitda of €614 million the previous year.
The offshore wind segment was particularly problematic. Saipem had entered the market as part of its energy transition strategy, but discovered that renewable energy required a different set of skills to guarantee returns comparable to traditional oil and gas work.
Existential Risk
The situation was genuinely existential. The company warned that "in the event that the Financing Package is not successful, the financial resources available to the group are expected to be exhausted by the first quarter of 2023." The group added there were "significant uncertainties" regarding the successful outcome of a hyper-dilutive capital increase.
Saipem's board on Thursday also approved consolidated financial statements for 2021, reporting a loss of €2.467 billion.
The €2 Billion Rescue
Saipem launched a 2 billion euro ($2.2 billion) capital increase this year and sold assets to help fund a turnaround plan to bring the troubled Italian energy services group back into the black.
Saipem, controlled by energy group Eni and state lender CDP, said its two core investors and banks would advance 1.5 billion euros of the capital increase. Eni and CDP, tied by a shareholder pact, would stump up 645 million euros while the banks would fund 855 million euros to help meet short-term liquidity needs.
On June 22, 2022, the Board of Directors exercised its authority to increase Saipem's share capital by €2 billion in divisible form through the issuance of 1,974,327,430 ordinary shares to be offered under option to ordinary and savings shareholders at a ratio of 95 new shares for each existing share. The subscription price was set at €1.013 per new share, of which €0.021 as share capital and €0.992 as share premium. The issue price of new shares embedded a discount of around 30% compared to the theoretical ex right price (TERP).
The capital increase was completed on July 15, 2022 and as a result the new share capital amounts to €501,669,790.83, divided into 1,995,557,732 ordinary shares and 1,059 no-par value savings shares.
New Leadership
In August 2022, CEO Francesco Caio resigned. During today's meeting Francesco Caio resigned, with immediate effect, from his role as board member and General Manager of the company. Mr Caio resigned all his powers as he considered completed, with the first half year results, his role to reposition and relaunch the company.
The board of directors unanimously appointed Alessandro Puliti as CEO, he was also upholding his role as General Manager, and conferred him all the powers previously held by Francesco Caio.
Puliti brought deep industry experience. He joined Agip spa's Reservoir Department in 1990 as a Reservoir Geologist and was involved in the study of reservoirs in Africa and Italy. His international professional career started in 1998, when he moved to Aberdeen to fill the position of Assistant Operated Asset Manager of Agip UK.
In September 2018 he was appointed Chief Development, Operations & Technology Officer of Eni and on July 1, 2019, he was appointed Chief Upstream Officer of Eni. From July 2020 to February 2022, he held the position of Chief Operating Officer of Natural Resources.
This was a deliberate choice: bringing in someone steeped in Eni's operational culture who understood both the oil and gas business and Saipem's unique position within the Italian energy ecosystem.
VIII. The Remarkable Recovery (2022–2025)
Turning the Ship Around
The turnaround that followed has been nothing short of remarkable. The capital increase strengthened the Company's financial and capital structure. At the end of the third quarter, net debt fell to €426 million, compared to €1,541 million at the end of 2021. Saipem's share price reached an annual low of €0.58 on September 20, before embarking on a recovery path from the beginning of October, with the share price consolidating at the €1 threshold in fourth quarter 2022.
The stock closed the year at €1.13 per share, up 93% from its September low.
2024: A Record Year
Saipem's performance in 2024 confirms, for the third consecutive year, the trajectory of growth and margin recovery of the Group, as well as the acceleration in cash flow generation and the strengthening of the company's balance sheet. Revenue stood at €14.5 billion in 2024, and EBITDA adjusted at €1.3 billion, corresponding to a growth year on year of 23% and 44% respectively. Net income in 2024 reached €306 million, increasing by 70% compared to 2023. With a record order intake of €18.8 billion in 2024, the backlog reached an all-time high of €34 billion, providing excellent visibility on Strategic Plan targets.
Saipem SpA achieved its highest quarterly revenue and EBITDA since 2012, with Q4 2024 revenue at EUR4.4 billion and EBITDA at EUR424 million.
Saipem's backlog reached an all-time high of EUR34 billion, providing strong revenue visibility for the next two years. The company generated EUR505 million of free cash flow in 2024, significantly outperforming its initial guidance, allowing for a proposed dividend more than three times higher than initial indications.
Major Contract Wins
The recovery was powered by significant contract awards. In May 2024, Saipem was awarded three new contracts by TotalEnergies EP Angola Block 20 for the Kaminho project relating to the development of Cameia and Golfinho oil fields, located approximately 100 km off the coast of Angola.
The contracts were for the Kaminho deepwater project relating to the development of Cameia and Golfinho oil fields, approximately 100 km offshore Angola. The overall amount of the contracts is $3.7 billion.
The first contract refers to the Engineering, Procurement, Construction, Transportation and Commissioning of the Kaminho Floating Production Storage and Offloading (FPSO) vessel. The second contract entails the Operation and Maintenance (O&M) of the same FPSO for 12 years, with a potential 8-year extension. The third contract involves the Engineering, Procurement, Supply, Construction, Installation, Pre-Commissioning and Assistance for the commissioning and start-up of a Subsea, Umbilicals, Risers and Flowlines (SURF) package.
The company also won major contracts in Suriname. Saipem was awarded an EPCI contract by TotalEnergies EP Suriname B.V. for the subsea development of the GranMorgu project, located in the Block 58 oil and gas field, 150 km off the coast of Suriname. The contract is worth 1.9 billion USD.
Saipem was awarded two offshore contracts in Saudi Arabia under its existing Long-Term Agreement with Saudi Aramco. The overall value of the two contracts is approximately 1 billion USD.
2025: Continued Momentum
"The trend of improvement in operational, economic and financial performance that started in 2022 continues in the third quarter of 2025." Saipem SpA reported EUR 221 million in net income and adjusted net income for the first three quarters, up 7.3 percent from the same nine-month period last year.
Saipem secured new contracts worth €7.5 billion in the first nine months of the year, including approximately €3.2 billion awarded in the third quarter. The company's total backlog stood at over €30 billion as of September 30, 2025.
Saipem confirms the guidance for 2025, which comprises: Revenue of approx. €15 billion, EBITDA of approx. €1.6 billion, Operating Cash Flow (after the repayment of lease liabilities) of approx. €900 million, Capex of approx. €500 million, Free Cash Flow (after the repayment of lease liabilities) of at least €500 million.
The company confirmed its 2025 guidance, emphasizing a robust backlog and a fully booked construction fleet for 2026. The construction fleet is fully booked for 2026 and getting very busy for 2027.
The EBITDA margin recovery tells the story most clearly. From loss-making in 2021, the margin has steadily improved: reaching 7.8% in 2023, 9.1% in 2024, and approaching 12% in the most recent quarters. This reflects both the roll-off of legacy problem contracts and the better terms secured on new awards.
IX. The Energy Transition Pivot
Offshore Wind: Opportunities and Lessons
With a long track record in offshore energy infrastructure, Saipem has focused on the offshore wind market as a key component of its energy transition strategy. With a long track record in the Engineering and Construction of offshore energy infrastructure, Saipem is keenly focused on the Offshore Wind market, with operations concentrated on contributing to the energy transition, with a commitment to the path of a sustainable future. From early engagement through construction and operations, we offer our services to developers of Offshore Wind, across the full development life cycle.
The company has executed significant wind projects. Further up the North Sea, in the UK sector, two further significant offshore wind farms have been completed by Saipem in the form of the Neart na Gaoithe Project and the Seagreen Project, which were both completed in 2023.
In 2020 Saipem was awarded a contract by Dogger Bank Offshore Wind Farms, a joint venture between SSE Renewables, Equinor and Vårgrønn for the transportation and installation of the jackets and topsides of two offshore HVDC (High Voltage Direct Current) substations for Dogger Bank A and Dogger Bank B, as well as a contract from Aibel for the Engineering, Procurement and Construction (EPC) of the aforementioned jackets. Each substation will consist of a topside and a four-legged jacket of over 3,100 tons installed at a water depth of approximately 28 metres, and will have a capacity of 1.2 GW.
The FĂ©camp project is an EPCI project for 71 gravity-based structures (GBS) as foundations for the FĂ©camp offshore wind farm located 12 km off the coast of Normandy, France. This 500 MW offshore wind farm can supply the equivalent electricity for 770,000 people. Each GBS weighs approximately 5,000 tons. The project was engineered and built onshore in Le Havre in just 2 years, and later transported and installed offshore with a heavy-lift vessel in less than 2 months. It is one of the first large-scale GBS projects used as foundations for an offshore wind farm.
However, the offshore wind entry also contributed to the 2022 crisis. The lesson learned was that renewable energy projects require different risk management approaches than traditional oil and gas work. Saipem unveiled a four-year plan to reposition its offshore wind strategy and help return the company to profitability. It intended to target low-risk projects in 2022 and 2023, before ramping up in 2024 and 2025.
Floating Wind and Future Technologies
Floating Wind technologies will be at the forefront of a zero-carbon emission future, heading into the next decade. Saipem provides not only Fixed-Bottom Offshore Wind solutions, assets and expertise, but also proprietary technology for Floating Wind WTG foundations and Floating-Offshore Substations.
Saipem recently unveiled its own semi-submersible floating wind foundation technology. The star-like shape foundation, named Star1, was selected for two floating wind projects planned to be built in Italy.
Broader Sustainability Strategy
Saipem's Sustainability Plan for 2025-2028 is organized around three pillars: managing environmental and social impacts of operations, providing innovative energy solutions such as offshore renewables and hydrogen, and driving progress towards clients' sustainability goals. A major part of this includes the Net Zero Programme, which sets clear emissions reduction milestones.
Saipem is investing in emerging technologies for floating wind, wave energy, floating solar power, hydrogen, and carbon capture. The Plan contains more than 100 objectives and consequent actions, indicators and targets on 13 sustainability issues concentrated in three pillars: fighting climate change and protecting the environment, focusing on people, and creating value in the supply chain and in local communities.
For investors, the energy transition pivot represents both opportunity and execution risk. The skills that made Saipem successful in offshore oil and gas—complex project management, deepwater engineering, fleet operations—are partially transferable to offshore wind. But as the 2022 crisis demonstrated, "partially transferable" can mean the difference between profit and catastrophic loss.
X. The Saipem7 Merger: Creating a Global Champion
Announcement and Rationale
On July 24, 2025, Saipem and Subsea7 announced that they have entered into a binding merger agreement, on terms and conditions in line with what previously communicated at the time of the signing of the Memorandum of Understanding on 23 February 2025.
The merger of Saipem and Subsea7 will create a global leader in energy services.
The company resulting from the merger between Saipem and Subsea7 will be renamed Saipem7, will have revenue of approx. €21 billion, EBITDA in excess of €2 billion, will generate more than €800 million of Free Cash Flow and will have a combined backlog of €43 billion. The highly complementary geographical footprints, competencies and capabilities, vessel fleets and technologies will benefit Saipem7's global portfolio of clients.
Subsea7: The Other Half of the Equation
Subsea 7 S.A. is a Luxembourgish multinational services company involved in subsea engineering and construction serving the offshore energy industry. The company is registered in Luxembourg with its headquarters in London. Subsea 7 delivers offshore projects and provides services for the energy industry. Subsea7 makes offshore energy transition feasible through working on lower-carbon oil and gas and by providing services for the growth of renewables and other emerging energy industries.
The company was formed by the January 2011 merger of two predecessor companies, Acergy S.A. and Subsea 7, Inc. Acergy was founded in 1970 as Stolt Nielsen Seaway, a division of the Norwegian Stolt-Nielsen Group offering divers for the exploration of the North Sea. After a series of acquisitions, including Comex Services of France in 1992 and Houston, Texas–based Ceanic Corporation in 1998, the company changed its name to Stolt Offshore in 2000.
Subsea7 has a twenty-year history but it can trace its roots to over 25 different legacy companies and businesses which, since the 1950's have evolved and overcome a succession of daunting subsea and marine challenges and, in the process, created the world-leading offshore contractor we are today. Our timeline shows the historical relationships between the companies which ultimately came together as Subsea 7.
Structure and Governance
The Combined Company would be created by way of an EU cross-border statutory merger carried out by way of incorporation of Subsea 7 into Saipem, with the latter to be renamed "Saipem7". The Combined Company would be headquartered in Milan and have its shares listed on both the Milan and the Oslo stock exchanges.
Siem Industries (being the largest shareholder of Subsea7) would then own approximately 11.9% of the Combined Company's capital, while Eni and CDP Equity (being the largest shareholders of Saipem) would own approximately 10.6% and approximately 6.4%, respectively.
The Asset Based Services business of Saipem will be structured as a separate legal entity comprising all of Subsea7's business. Combined company to be headquartered in Milan, Italy and Offshore E&C separate legal entity to be headquartered in London, UK.
Subsea7's businesses and Saipem's asset-based services business, including offshore wind, will be comprised in the Offshore Engineering & Construction unit. The unit will be an operationally autonomous company named Subsea7 and fully owned by Saipem7, branded as "Subsea7, a Saipem7 Company". The new, Saipem7-owned Subsea7 will represent approximately 84 per cent of the combined group's EBITDA for the last twelve months as of 31 December 2024.
Shareholder Returns and Timeline
Both Saipem's and Subsea7's Extraordinary General Meetings will take place on 25 September 2025. Completion is currently anticipated to occur in the second half of 2026.
In 2026, if the Proposed Combination is not completed before the approval of the full year 2025 results of Saipem and Subsea7, the two companies could each distribute by way of dividends at least $300 million. Following completion of the Proposed Combination, the Combined Company is expected to distribute to shareholders at least 40% of Free Cash Flow after repayment of lease liabilities.
Cassa Depositi e Prestiti's CEO, Dario Scannapieco, commented: "Together with Eni, we have worked in harmony and successfully completed a major industrial transaction. The combination of Saipem and Subsea7 activities represents a significant strengthening of high-tech companies that are already well-established in their respective markets. From today, by leveraging their complementarity, they are creating a new entity destined to become a global leader in the sector."
The Competitive Landscape
At this time, the top 5 – Saipem7, TechnipFMC, Allseas, Boskalis, and DEME – represent the cutting edge of engineering, logistics, and project execution. Their fleets, backlogs, and technical expertise guarantee that they'll remain essential players in shaping the future of offshore energy.
Oil and gas operators prefer fewer contract interfaces. With Saipem7, topside fabrication, subsea installation, hook-up, and commissioning can all be handled by one contractor. For megaprojects in LNG or deepwater gas, Saipem7 now sets the standard among the largest offshore construction companies.
XI. Bull Case, Bear Case, and Competitive Analysis
Porter's Five Forces Analysis
Threat of New Entrants: LOW The offshore EPC industry has massive barriers to entry. Specialized vessels cost hundreds of millions of dollars and take years to build. Technical expertise requires decades to develop. Relationships with national oil companies and majors are built over project cycles spanning 5-10 years. New entrants cannot credibly compete for mega-projects.
Bargaining Power of Suppliers: MODERATE Saipem depends on specialized equipment manufacturers, shipyards for vessel construction and maintenance, and a global supply chain for materials. However, its scale provides negotiating leverage, and vertical integration (through fabrication yards) reduces supplier dependence.
Bargaining Power of Buyers: MODERATE TO HIGH Oil majors and national oil companies have substantial negotiating power due to project scale and the cyclical nature of offshore investment. However, for technically challenging deepwater projects, only a handful of contractors can credibly bid, reducing buyer leverage.
Threat of Substitutes: LOW (short-term), INCREASING (long-term) In the medium term, there are no substitutes for offshore oil and gas infrastructure. Longer term, the energy transition creates structural uncertainty about future offshore hydrocarbon demand. However, offshore wind creates offsetting opportunities.
Competitive Rivalry: HIGH Top oil and gas EPC companies are TechnipFMC Plc, WorleyParsons Limited, Saipem SpA, Petrofac Limited, Bechtel Corporation, KBR Inc and Fluor Corporation. Competition for mega-projects is intense, with price and technical differentiation as key factors.
Hamilton Helmer's 7 Powers Framework
Scale Economies: PRESENT Saipem7's combined revenue of €21 billion and vessel fleet create genuine scale advantages in procurement, engineering overhead allocation, and vessel utilization.
Network Effects: LIMITED Unlike platform businesses, offshore EPC does not benefit from classic network effects.
Counter-Positioning: EMERGING The integrated model (EPC + drilling + offshore wind) represents potential counter-positioning against pure-play specialists who cannot match the full-service offering.
Switching Costs: MODERATE Once a contractor is selected for a multi-year project, switching costs are substantial. However, between projects, switching costs are minimal.
Branding: LIMITED In B2B project bidding, brand matters less than track record, technical capability, and price.
Cornered Resource: PRESENT Specialized vessels like Saipem 7000 represent genuine cornered resources—assets that competitors cannot easily replicate.
Process Power: DEVELOPING Decades of deepwater project execution have created embedded organizational knowledge that is difficult to replicate. This may constitute process power, though it is difficult to measure.
The Bull Case
-
Merger Synergies: The Saipem7 combination creates the world's preeminent offshore EPC contractor with unmatched fleet, geographical coverage, and client relationships. Synergy estimates of approximately 14% of combined EBITDA suggest meaningful value creation.
-
Favorable Market Cycle: Deepwater investment is entering an upcycle. Management discussed industry trends, including increasing deepwater drilling demand and a shifting mix toward national oil company projects. The construction fleet is fully booked through 2026 and filling for 2027.
-
Energy Transition Optionality: Offshore wind capabilities create exposure to a structural growth market, with fixed-bottom experience transferable to floating wind as that technology matures.
-
Backlog Visibility: €30+ billion backlog provides exceptional revenue visibility and reduces execution risk from new contract bidding.
-
Financial Strength: The balance sheet transformation from €2.5 billion loss in 2021 to positive net cash position demonstrates management execution capability.
The Bear Case
-
Execution Risk: Fixed-price EPC contracts create asymmetric downside risk. A single troubled mega-project can eliminate years of profits, as the 2022 crisis demonstrated.
-
Merger Integration: Combining two large organizations with different cultures (Italian vs. Norwegian/UK heritage) creates integration risk. Synergy targets may prove optimistic.
-
Geopolitical Exposure: Saipem's history includes projects in Russia (Nord Stream), Algeria (corruption scandals), and other politically volatile regions. Sanctions, conflicts, and regulatory changes create unpredictable risks.
-
Energy Transition Uncertainty: Long-term demand for offshore oil and gas infrastructure depends on the pace of energy transition. Accelerated decarbonization could strand assets and reduce future contract opportunities.
-
State Influence: The continued involvement of Eni (30%) and CDP creates governance complexity. Strategic decisions may reflect Italian state interests rather than pure commercial optimization.
-
Offshore Wind Learning Curve: The 2022 crisis originated partly from offshore wind project execution problems. Replicating success in traditional oil and gas may prove more difficult than anticipated.
Key KPIs to Monitor
1. EBITDA Margin: The single most important metric for tracking operational improvement. The trajectory from loss-making to approaching 12% reflects both legacy contract completion and improved bidding discipline. Target: sustained double-digit margins.
2. Order Intake / Backlog Coverage: Measures both commercial success and revenue visibility. The ratio of annual order intake to revenue execution indicates whether the backlog is growing, stable, or depleting. Current backlog of €30+ billion provides approximately 2 years of revenue coverage at current run rates.
XII. Conclusion: From Mattei's Vision to Saipem7
The story of Saipem spans nearly seven decades of Italian industrial history—from the rubble of post-war reconstruction to the deepest waters of the world's oceans. It is a story of visionary leadership, technical achievement, corporate crisis, and remarkable renewal.
Enrico Mattei created the company as an instrument of Italian energy independence, part of his audacious challenge to the Anglo-American oil cartel. That original purpose—serving both commercial and national interests—created a dual identity that persists today in the continued involvement of Eni and CDP Equity.
The technical achievements are beyond dispute. Saipem, a former subsidiary of Eni, is a major force in offshore engineering, procurement, and construction (EPC). It operates a sophisticated fleet of vessels, including the iconic Saipem 7000, one of the largest crane vessels globally. From the Trans-Mediterranean Pipeline to Nord Stream to the deepwater fields of Angola and Suriname, Saipem has repeatedly pushed the boundaries of what is technically possible in subsea construction.
But the journey has not been smooth. Corruption scandals in Algeria and Nigeria revealed governance weaknesses embedded in the company's state-adjacent structure. Profit warnings in 2013-2016 and the near-death experience of 2022 demonstrated the brutal economics of fixed-price EPC contracts, where things that can go wrong often do—and when they do, the financial consequences are catastrophic.
The recovery since 2022 has been remarkable. Under CEO Alessandro Puliti—an Eni veteran with deep operational experience—the company has returned to profitability, rebuilt its balance sheet, and assembled a record backlog. The trajectory from €2.5 billion loss to €300+ million profit in three years represents one of the most successful corporate turnarounds in recent European industrial history.
Now comes the merger with Subsea7—a transaction that will create "Saipem7," a global offshore engineering champion with €21 billion in revenue and €43 billion in combined backlog. Starting with the beginning of 2025, Saipem and Subsea7 merged to create Saipem7, instantly making it one of the largest offshore construction companies in the world. This merger combined Saipem's strong onshore and offshore EPC capabilities with Subsea7's subsea engineering and fleet power.
The merger represents the culmination of decades of consolidation in the offshore services industry—a recognition that scale, fleet capability, and global reach are essential to competing for the mega-projects that define the industry. Whether the combination delivers on its promise will depend on execution: integrating two complex organizations, capturing synergies without disrupting operations, and navigating the uncertainties of energy transition.
For long-term investors, Saipem offers exposure to a critical enabler of global energy infrastructure—both traditional hydrocarbons and offshore renewables. The company's technical capabilities are world-class; its backlog provides exceptional visibility; its management has demonstrated crisis management capability. But the risks are equally real: execution risk on fixed-price contracts, geopolitical exposure, merger integration complexity, and the structural uncertainty of long-term hydrocarbon demand.
The legend of Enrico Mattei—the resistance fighter who defied the Seven Sisters and built Italy's energy independence—still echoes through Saipem's corporate identity. Whether Saipem7 can honor that legacy while navigating the challenges ahead remains to be seen. What is certain is that this company, forged in the fires of post-war reconstruction and tempered by decades of crisis and renewal, will continue to play a central role in the global energy story for decades to come.
Material Regulatory and Legal Matters: Investors should note that while Saipem was acquitted of Algeria corruption charges in Italian courts in 2020, and the company resolved related matters with SEC in 2020, such proceedings highlight ongoing governance and compliance risks inherent in operating in high-risk jurisdictions. The proposed Saipem7 merger remains subject to shareholder approval (scheduled for September 2025) and regulatory clearances, with completion expected in H2 2026.
Spotify
Apple Podcasts
Amazon Music
Audible
YouTube
Castbox
Pocket Casts