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Subsea 7: Engineering the Seabed for the World's Energy
I. Introduction: The Invisible Infrastructure Beneath the Waves
Off the coast of Norway, in waters so deep that sunlight barely penetrates, a ballet of precision engineering unfolds daily that few people ever witness. Subsea 7 employs approximately 15,000 people across more than 30 countries worldwide, orchestrating the installation of umbilicals, risers, and flowlines—the critical nervous system connecting undersea oil wells to the platforms and floating production systems that bring energy to shore. Subsea 7 S.A. is a Luxembourgish multinational services company involved in subsea engineering and construction serving the offshore energy industry.
With a current market capitalization of approximately $6 billion and trailing twelve-month revenue of approximately $7 billion, Subsea 7 stands as one of the world's premier subsea contractors—yet its name rarely appears in mainstream business coverage. This is a company whose success is measured in pipe-in-pipe kilometers laid at crushing depths, in foundations installed for offshore wind turbines that will power millions of homes, and in the unglamorous but essential work of maintaining aging offshore infrastructure that fuels global commerce.
The company's story defies simple categorization. How did an enterprise tracing its lineage to a 19th-century Norwegian shipping company established in 1854, whose main operation until 1964 was passenger transportation, transform into the world's leading subsea contractor? How did it not only survive the brutal 2014-2016 oil price collapse that decimated competitors, but emerge stronger and better positioned? And now, as the world grapples with the energy transition, how is Subsea 7 simultaneously executing multi-billion dollar oil and gas projects while building offshore wind farms across three continents?
On July 24, 2025, the signing of the Subsea7 and Saipem merger agreement was announced. The new entity will take the name Saipem7 and will remain incorporated in Italy and headquartered in Milan, with shares listed on both the Milan and Oslo stock exchanges. This transformational deal—the latest in a series of industry-shaping mergers that defined Subsea 7's trajectory—promises to create a global energy services colossus.
The story of Subsea 7 is ultimately a story about scale, survival, and strategic vision in one of the world's most capital-intensive industries. It's about the men and women who work hundreds of meters below the ocean surface in pressurized diving bells, and the engineers who design systems capable of withstanding crushing pressures while delivering flawless performance for decades. And it's about an industry that remains essential to global energy security even as it pivots toward the renewables that will power tomorrow.
II. Origins: From 19th Century Shipping to North Sea Pioneers (1854–1990s)
The Norwegian Maritime Heritage
To understand Subsea 7, you must first understand Norway—a nation whose identity is inseparable from the sea. For centuries, Norwegians built their economy on what the ocean provided: fish, shipping routes, and eventually, something far more valuable lying beneath the seabed itself.
Subsea 7 traced its roots back to Det Søndenfjelds-Norske Dampskipselskap AS 'DSND,' which was established in 1854. The main operation of the company until 1964 was shipping, with a focus on passenger transportation. In 1964, the company's passenger liner service between Hamburg and Oslo was closed down, and the company's activity level was then limited until 1985.
For more than a century, DSND was simply another Norwegian shipping concern, ferrying passengers and cargo across the North Sea. When its passenger service ended in 1964, the company entered a dormant period—just as Norway itself was about to undergo a transformation that would reshape its economy and its place in the world.
The Ekofisk Moment
At the end of the 1950s, very few people believed there were rich oil and gas deposits to be discovered on the Norwegian continental shelf. The Geological Survey of Norway even wrote to the Ministry of Foreign Affairs in 1958 stating that the possibility of finding coal, oil or sulphur on the continental shelf off the Norwegian coast could be discounted. But the discovery of the Groningen gas field in the Netherlands in 1959 opened people's eyes to the prospect that there could be hydrocarbons under the North Sea.
Everything changed on a cold December day in 1969. Just before Christmas in 1969, Phillips informed the Norwegian authorities of the discovery of Ekofisk, which turned out to be one of the largest offshore oil fields ever discovered. This was when Norway's success story started in earnest. Production from the field started on 15 June 1971.
Oil was not discovered offshore until 1969 when Phillips Petroleum drilled a successful well in what later became known as the Ekofisk field in the Norwegian sector. Subsequent development in the North Sea was galvanized by oil crises in 1973 and 1979, both of which drove up oil prices and improved the economics of the North Sea.
The North Sea became the crucible for an entirely new industry. The North Sea, by virtue of being renowned as one of the most inhospitable locations for oil and gas operations, demanded innovation in offshore operations. Design solutions like steel jackets, concrete gravity platforms, tethered semisubmersibles, tension-leg platforms, and underwater manifold systems are all products of North Sea innovation. The chop in the surrounding seas made tanker loading difficult and necessitated a way to temporarily store significant amounts of oil at sea. This in turn gave birth to the Condeep—a giant concrete-reinforced production platform with huge storage tanks—patented and developed in Norway in 1972.
The Diving Pioneers: Comex and Stolt-Nielsen Seaway
While DSND lay dormant, the real pioneers of subsea work were creating an entirely new profession: commercial saturation diving. COMEX (or Compagnie Maritime d'Expertises) is a French company specializing in engineering and deep diving operations, created in November 1961 by Henri-Germain Delauze. This company is known worldwide for its technology in regard to underwater exploration at great depths. COMEX carried out pioneering work in very deep saturation diving.
Saturation diving—where divers live under pressure for extended periods to work at extreme depths—represented the cutting edge of human endurance and engineering. The diving depth record for off-shore saturation diving was achieved in 1988 by a team of COMEX professional divers. The Hydra programme culminated with Hydra X (Hydra 10) in 1992 when COMEX diver Théo Mavrostomos achieved a record simulated dive of 701 metres (2,300 feet) in an onshore hyperbaric chamber.
In Norway, another thread of the story was being woven. The company started as the Haugesund-based Stolt Nielsen Seaway and offered divers for the exploration of the North Sea in 1970. The company was part of the Stolt-Nielsen Group. In 1989 the company expanded to Aberdeen and in 1992 it acquired the French diving company Comex Services.
This acquisition brought together two pioneering forces in subsea work. Comex Services S.A. was a leading worldwide subsea services contractor, which pioneered deepwater saturation diving and subsea construction using both manned and unmanned techniques. Stolt-Nielsen Seaway A/S operated principally in the North Sea and pioneered the development and use of specially designed, technologically sophisticated diving support ships and ROVs to support operations in hostile deepwater environments.
DSND's Offshore Pivot
By the mid-1990s, DSND had finally awakened to the opportunity offshore. The transformation was remarkable in its speed and ambition. According to the company's history, by 1995 DSND owned six special offshore vessels, of which two were for offshore construction, two for well maintenance, and two for geo-technical drilling. The company planned for further expansion into these three business areas through the addition of technology and human capital.
The timing was impeccable. The North Sea was maturing, but deepwater frontiers beckoned worldwide. The oil majors needed contractors who could execute increasingly complex projects in ever-more challenging environments. And consolidation was becoming the only path to the scale required.
III. The Consolidation Era: Building Scale Through M&A (1992–2010)
The Logic of Industry Consolidation
The subsea contracting business operates under brutal economic logic. Specialized vessels costing hundreds of millions of dollars sit at the heart of every operation. Clients—the world's largest oil companies—demand contractors with global reach, proven track records, and the financial strength to weather project delays and cost overruns. In such an environment, subscale players face an existential challenge: grow or die.
Acergy's Assembly
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. Five years later Stolt-Nielsen spun out the company as an independent business listed on the Oslo Stock Exchange and NASDAQ. The firm renamed as Acergy in March 2006.
Acergy S.A. was an international offshore seabed-to-surface engineering and construction company previously known as Stolt Offshore and Stolt Comex Seaway and was part of the Stolt-Nielsen Group until 2005. The company was registered in Luxembourg and had its headquarters in London in the United Kingdom as well as offices in Stavanger, Norway; Aberdeen, United Kingdom; Suresnes, France; Houston, United States; Rio de Janeiro, Brazil; Perth, Australia; St. John's, Canada and Singapore. The company was listed on the Oslo Stock Exchange and NASDAQ.
The company had four main operational areas: Subsea Umbilical Risers and Flowlines (SURF); Inspection, Maintenance and Repair (IMR) and Conventional Field Development. Main Joint Ventures included: Seaway Heavy Lifting in Netherlands, NKT Flexibles in Denmark, SapuraAcergy in Malaysia, Global Oceon Engineers in Nigeria.
Subsea 7 Inc.'s Formation
The other piece of the puzzle came together through an equally complex series of transactions. Subsea 7, Inc. was the result of a series of mergers between DSND Offshore AS, Halliburton Subsea, Subsea Offshore and Rockwater over an extended period, with Rockwater and SubSea merging in 1999 to form Halliburton Subsea.
On October 18, 2001, DSND announced that it was in discussions with Halliburton on combining their respective activities within subsea construction and related services. On May 23, 2002, the two companies announced that they had completed a final agreement for the creation of the 50/50 joint venture company Subsea 7 Holding Inc., registered in the Cayman Islands. On November 15, 2004, the company announced that it had entered into heads of agreement with Halliburton to acquire the Halliburton Group's 50% share of Subsea 7 Holding Inc. The company was listed on the Oslo Stock Exchange in August 2005.
The joint venture was established on May 23, 2002, as a 50/50 joint venture between DSND, a Norwegian diving and engineering firm, and Halliburton Subsea, with the aim of creating a leading provider of subsea engineering, construction, and services for the offshore oil and gas industry. The new entity combined the expertise and assets of both partners, including a fleet of 23 dynamically positioned vessels and 113 remotely operated vehicles (ROVs), to deliver comprehensive subsea solutions from initial design through installation and maintenance.
Why Halliburton Exited
Halliburton's decision to exit the joint venture in 2004 reflected a broader strategic shift among oilfield services companies. The American giant was refocusing on its core drilling and well completion services, while DSND under Chairman Kristian Siem saw an opportunity to build something more substantial in subsea contracting.
Subsea 7 was created on May 23, 2002 as a joint venture between DSND and Halliburton Subsea. In 2004, DSND acquired Halliburton's stake in the joint venture and floated the business as Subsea 7 Inc on the Oslo Børs in Norway. In January 2011, Subsea 7 Inc combined with Acergy S.A. to form Subsea 7 S.A., which remains listed on the Oslo Børs with SUBC as its ticker.
By the late 2000s, both Acergy and Subsea 7 Inc. had established themselves as significant players in the subsea market. But neither had the scale to compete effectively with the integrated offerings of larger competitors or to bid for the mega-projects that oil majors increasingly favored. The logic of combination was becoming irresistible.
IV. The Mega-Merger: Acergy + Subsea 7 Inc. (2010-2011)
The Deal That Reshaped the Industry
On 21 June 2010 the combination of Acergy S.A. and Subsea 7 Inc. was announced and was completed on 7 January 2011. The new entity took the Subsea 7 name while retaining Acergy's Luxembourg domicile and operational headquarters in London. The chairman and chief executive roles were filled by Kristian Siem and Jean Cahuzac, who had previously held the same roles at Subsea 7 and Acergy respectively.
The merger created a subsea powerhouse unlike anything the industry had seen. The merger created a combined entity with approximately 12,000 employees and a project backlog of $6.8 billion as of December 2010, effectively doubling the workforce from the pre-merger levels of each company and significantly expanding capabilities for large-scale offshore projects.
Strategic Rationale
Subsea 7 CEO Jean Cahuzac said the creation of the new company in seabed-to-surface engineering, construction and contract services to the offshore energy industry will allow it to secure and deliver offshore projects of the size and complexity that the company expects will emerge in the coming decade. "Our leadership position and global footprint will give us opportunities to grow faster than either Acergy SA or Subsea 7 Inc could have achieved on their own."
Subsea 7 S.A. will benefit from the value created by the combination of our people, our expertise and our highly complementary fleet, supported by a larger capital base and the synergies expected to result from the combination. Our leadership position and global footprint will give us opportunities to grow faster than either Acergy S.A. or Subsea 7 Inc. could have achieved on their own.
Regulatory Hurdles
The merger attracted regulatory scrutiny, particularly in the United Kingdom where both companies had significant operations. The OFT announced on 17 August 2011 that it has accepted undertakings from Acergy to dispose of a pipelay vessel in order to address competition concerns arising from the completed acquisition of Subsea 7 Inc by Acergy S.A. (since renamed Subsea 7 S.A.). As a result, the merger will not be referred to the Competition Commission. Under the terms of the undertakings, the pipelay vessel, the Acergy Falcon, will be sold to Grup Servicii Petroliere SA (GSP).
As concerns were raised by a number of third parties, the OFT also assessed the extent of overlap in the supply of services for pipelay projects in the North Sea, including integrated pipelay and diving services. It found that the merger would raise competition concerns in relation to the provision of small diameter rigid pipelay services alone and projects which require the provision of both small diameter rigid pipelay and diving services. The investigation showed that Acergy S.A. and SubSea 7 Inc are two of three major firms who compete closely in these two areas.
Leadership Structure
The merger brought together two of the industry's most experienced executives. Kristian Siem (born February 7, 1949) is a Norwegian businessman. He is chairman of Subsea 7 and Siem Industries, a formerly-listed company with ownership interests in the oil and gas industry and shipping. He worked for Fred Olsen's shipping company until 1978, when he bought a cheap oil rig, which today has the name Borgsten Dolphin.
Siem was the chairman and main shareholder of the Norwegian Cruise Line. In 2011, the King of Norway awarded Siem the Royal Norwegian Order of St. Olav for his service to business.
Jean Cahuzac has been in the industry for 41 years and CEO for Subsea 7 since 2008, having previously worked for Transocean and Schlumberger. Following his retirement as CEO, Jean continued as a Non-Executive Director of the Company.
Mr Cahuzac has over 30 years experience in the offshore oil and gas industry, having held various technical and senior management positions around the world. From 2000 until April 2008 he worked at Transocean in Houston, US, where he held the positions of Chief Operating Officer and then President, prior to the merger with Global SantaFe. Prior to this he worked at Schlumberger from 1979 to 2000 where he served in various positions including Field Engineer, Division Manager, VP Engineering and Shipyard Manager, Executive VP and President. He holds a Masters degree in Mechanical Engineering from Ecole des Mines de St-Etienne and is a graduate of the French Petroleum Institute in Paris.
The pairing of Siem's entrepreneurial vision and financial acumen with Cahuzac's deep operational expertise created a leadership team uniquely suited to navigating the challenges ahead. Neither could have anticipated just how soon those challenges would arrive.
V. The Oil Price Crash & Survival (2014-2018)
The Storm Arrives
The years immediately following the 2011 merger proved prosperous. Oil prices hovered above $100 per barrel, and the industry poured capital into offshore developments worldwide. Subsea 7's backlog swelled, margins expanded, and the strategic logic of the merger seemed vindicated.
Then came the crash.
The world price of oil was above US$125 per barrel in 2012, and remained relatively strong above $100 until September 2014, after which it entered a sharp downward spiral, falling below $30 by January 2016.
The stunning drop in oil prices, from a peak of $115 per barrel in June 2014 to under $35 at the end of February 2016, has been one of the most important global macroeconomic developments of the past 20 months.
The causes were multiple and mutually reinforcing. The Organization of Petroleum Exporting Countries has been severely affected by the 2014 collapse in prices. Shale production robbed OPEC of a large portion of its market power, forcing it to co-operate with other producers to keep prices up after Saudi Arabia effectively declared defeat in the price war in 2016.
The drop in oil price has led to a major short-term drop in investment in the oil industry, with global investment in production and exploration falling from $700 billion in 2014 to $550 billion in 2015, with spill-over to energy commodities. Sharp declines in investment in other commodity sectors have also contributed to overall slow global growth. There is no question that the oil price drop has been a significant contributor to the financial market volatility of the past year.
Impact on the Subsea Industry
For subsea contractors, the impact was devastating. Projects were cancelled or deferred indefinitely. Day rates collapsed. Companies that had expanded aggressively during the boom years found themselves drowning in debt and overcapacity.
The low oil and gas prices continued to depress industry activity as clients delayed and cancelled new projects. Subsea 7's backlog, which had peaked above $8 billion, began to erode as new orders slowed to a trickle. In February 2016, the company was awarded the West Nile Delta Phase Two project offshore Egypt—a notable win—but such large awards were becoming increasingly rare.
The company's order backlog stood at $6.1 billion at the end of 2015, down from $8.2 billion in 2014—a decline of 25% in a single year. For an industry that plans in multi-year project cycles, such a rapid contraction was existentially threatening.
Subsea 7's Response
Where competitors faltered, Subsea 7's disciplined approach to balance sheet management proved decisive. In 2015, the company implemented a number of initiatives to position itself for an extended period of low activity and strengthen itself for when the business environment improved. These initiatives included simplification of the Group's reporting structure, formation of new alliances with industry-leading partners, investment in innovation to drive lower-cost solutions through new technology and better ways of working, and reduction of costs by resizing the business.
In June 2016, Subsea 7 announced it would start a second phase of global resizing and cost reduction measures. The move reflected management's assessment that recovery would be slower than initially hoped—a realistic appraisal that allowed the company to calibrate its cost base appropriately.
Throughout the downturn, Subsea 7 maintained strong operational performance: consistently good execution and 91% active vessel utilisation demonstrated that efficiency improvements were genuine, not merely cost cuts that would impair future competitiveness. Adjusted EBITDA margins of 31% reflected cost discipline, operational performance, and successful project completions.
Most critically, the company preserved its balance sheet. Cash and cash equivalents remained around $1.4 billion, with net cash of approximately $943 million. As management noted at the time, "Subsea 7's strong financial and liquidity position is a competitive advantage." This would prove prophetic as competitors struggled to survive.
Lessons from the Downturn
The industry that emerged from the 2014-2016 crash was fundamentally different. Operators had learned to develop offshore fields at dramatically lower costs. Project economics that once required $100 oil became viable at $50. Technology advances, design standardization, and collaborative approaches between operators and contractors became industry norms rather than exceptions.
The subsea business began showing signs of improvement by 2018. From a 20+ year low for subsea tree demand in 2016, there had been a level of recovery. Focus shifted to proven basins like the Gulf of Mexico and Brazil, but also new frontiers like Guyana where Exxon's discoveries were reshaping expectations for deepwater development economics.
For Subsea 7, the downturn validated the merger strategy. Scale had provided the financial resilience to survive. Operational excellence had preserved client relationships. And balance sheet strength meant the company could invest in the next growth phase while others were still repairing their foundations.
VI. The Energy Transition Pivot: Seaway7 & Offshore Wind (2017-2024)
The Strategic Opportunity
Even as Subsea 7 navigated the oil crash, management was positioning for a different kind of opportunity. The same engineering capabilities that enabled installation of subsea infrastructure in harsh deepwater environments could be applied to another rapidly growing sector: offshore wind.
Subsea 7's Renewables business unit has since 2009 installed over 700 foundations, more than 30 substations, and over 800 kilometres of submarine cables using its fleet of two heavy lift vessels, two cable lay vessels, and an installation support vessel.
The company had been building offshore wind capabilities for over a decade, but 2021 marked a decisive strategic escalation.
Creating Seaway7
Subject to the customary approvals, conditions and relevant employee consultations, the combined company will be renamed Seaway 7 ASA and will initially retain OHT's listing on Oslo's Euronext Growth market, with a view to a future listing on Oslo Børs. The transaction will create a listed, pure play renewables company, headquartered in Oslo and focused on offshore fixed wind. Subsea 7 will retain its business in floating wind, which will not be part of this transaction.
Offshore installation giant Subsea 7 has informed that the merger between its offshore wind subsidiary Seaway 7 and offshore and heavy lift vessel owner OHT has been completed. Subsequent to the combination, first proposed in July 2021, OHT ASA will be re-named Seaway 7 ASA. Subsea 7's subsidiary Subsea 7 Blue Space Limited holds 72% of the merged company Seaway 7, and OHT's shareholders 28%.
The merged company, focused on offshore wind installation, will be managed by an executive team led by Stuart Fitzgerald as Chief Executive Officer, previously Subsea 7's Executive Vice President - Alliances and Strategy. Torgeir E. Ramstad, CEO of OHT, will be appointed EVP Vessels and Offshore Resources at Seaway 7. Steph McNeill, Subsea 7 EVP Renewables, will be Chief Operating Officer.
"This transaction represents an important next step in Subsea 7's Energy Transition journey that will accelerate and enhance value creation for our shareholders," said John Evans, Chief Executive Officer of Subsea 7. "As a listed company with a comprehensive fleet and experienced management team, Seaway 7 ASA is positioned to forge an enhanced growth trajectory as a global leader in offshore wind. Subsea 7 looks forward to working closely with Seaway 7 as it launches this next exciting chapter in its evolution."
Market Position and Track Record
Seaway7 has been active in the offshore Renewables Energy industry since 2009, when we installed our first Wind Turbine Generator (WTG) monopile foundation offshore in the UK, and has since built an industry-leading track record in installing WTG foundations, substations and inner array cables for many of the key offshore wind developers in Europe, Taiwan and the US. To date Seaway7 has installed over 800 wind turbine generator foundations, 30 substations and 2500km of inner array cables.
The results have been impressive. In 2022, Seaway7 supported the delivery of around 30% of the world's additional offshore wind capacity outside of China. The company has become a leader in the delivery of offshore wind projects globally.
Dogger Bank Wind Farm and delivery partner Seaway7 have installed all 277 transition pieces on Dogger Bank Wind Farm, marking the completion of all foundation installation work on the 3-phase offshore wind project in the North Sea. Seaway7's heavy-lift vessel, Seaway Alfa-Lift installed the 87th and final transition piece onto its corresponding monopile foundation at Dogger Bank C, the third phase of Dogger Bank Wind Farm, in late November. This milestone followed the previous installation of 95 transition pieces at the Dogger Bank A and 95 at the Dogger Bank B phases of the project.
The Offshore Wind Market Opportunity
8 GW of new offshore wind capacity was grid-connected worldwide last year. New additions were 26% lower than the previous year, making 2024 the fourth-highest year in offshore wind history. China led the world in new offshore wind installations for the seventh year in a row, followed by United Kingdom, Taiwan (China), Germany and France. The top five markets made up 94% of the new additions in 2024. The global offshore market grew on average by 10% each year in the past decade, bringing total installations to 83.2 GW.
Annual offshore wind installations are expected to double in 2025, triple in 2027 and then sail past the milestones of 30 GW in 2030. By 2034, they are expected to reach 55 GW, bringing the offshore share of new wind power installations from today's 7% to about 25%.
The strategic logic is compelling: the same harsh-environment expertise that Subsea 7 developed over decades in oil and gas translates directly to offshore wind. Foundation installation, cable laying, and heavy lifting all demand specialized vessels and experienced crews. The energy transition isn't eliminating demand for Subsea 7's capabilities—it's expanding the addressable market.
VII. The Saipem Merger: Creating a Global Colossus (2025)
A Transformational Deal
On July 24, 2025, Saipem and Subsea7 announced that they had 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. The diversification of the geographical footprint of Saipem and Subsea7 is reflected in the combined backlog, with no single country contributing more than 15% of total.
Scale of the Combined Entity
It will operate a fleet of more than 60 vessels and drilling rigs, have a workforce of over 44,000 professionals. After this EU cross-border statutory merger is completed, Siem Industries would own around 11.8% of Saipem7's share capital, while Eni will own 10.6% and CDP Equity 6.4%. Subsea7 shareholders participating in this proposed combination will receive 6.688 new Saipem shares for each Subsea7 share held.
A deal would create a truly global oilfield service giant with over $12.4 billion in revenue. The combined entity would have the world's largest fleet of subsea installation vessels and be the largest provider of SURF services, with a market share of close to 40%. In addition, Saipem has a diverse portfolio including large-diameter pipeline installation vessels, offshore drilling rigs, one of the world's biggest crane vessels and numerous offshore fabrication yards. Such a merger would create the fourth-largest oilfield service company, after Schlumberger, Halliburton and Baker Hughes.
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 Offshore Engineering & Construction business will be contained within an operationally autonomous company, fully owned by Saipem7, named Subsea7, branded as "Subsea7, a Saipem7 Company," and will comprise all Subsea7's businesses and the Asset Based Services business of Saipem (including Offshore Wind). This structure preserves the Subsea7 brand and operational identity while capturing combination benefits.
Strategic Rationale
By combining with Saipem, Subsea 7 would get exposure to onshore engineering and construction, where Saipem has a solid track record in the petrochemical and liquefied natural gas industries, thus reducing dependence on upstream oil and gas activities. Furthermore, Saipem has a legacy name in the Middle East and many contracts in this booming market. With this move, the merged entity could possibly vie with McDermott for the leading role in the oilfield services segment in the region.
A potential merger could also have ramifications for the ways in which OFS companies and exploration and production companies structure subsea contracts. If this merger comes to fruition, all top five SURF suppliers will have effectively entered into a major alliance covering subsea work. "Rival contractor TechnipFMC is having great success with the integrated subsea model, which combines subsea production systems and subsea installation."
Timeline and Approvals
Both Saipem's and Subsea7's Extraordinary General Meetings took place on 25 September 2025. Completion is currently anticipated to occur in the second half of 2026.
The September shareholder meetings marked a crucial milestone in the transaction process. Regulatory approvals remain pending, but the industrial logic of the combination has been broadly accepted by investors and analysts alike.
VIII. Business Model Deep Dive: Understanding SURF and Subsea Services
What Subsea 7 Actually Does
Subsea 7 SA is the engineering and construction service provider in the offshore oil and gas industry. It provides a range of services, including subsea umbilicals, risers, and flowlines (SURF), fabrication, installation, maintenance, and heavy lifting, among many others. Its segments are Subsea and Conventional, Renewables, and Corporate. The group generates the majority of its revenue from the Subsea and Conventional segment, which includes Subsea Umbilicals, Risers and Flowlines, Conventional services, Activities associated with the provision of inspection, repair and maintenance (IRM) services, heavy lifting operations and decommissioning of redundant offshore structures, carbon capture, and utilisation and storage. Its geographic areas are Norway, Brazil, the United Kingdom, and Others.
The SURF Business
The acronym SURF—Subsea Umbilicals, Risers, and Flowlines—captures the essential infrastructure connecting underwater wells to surface production facilities:
Umbilicals function as the "nervous system" of a subsea development. These complex bundles of electrical cables, hydraulic lines, and chemical injection tubes enable operators to control subsea equipment, monitor well conditions, and inject chemicals to prevent hydrate formation and corrosion. A single umbilical can stretch for dozens of kilometers and contain dozens of individual components, all of which must function flawlessly at pressures that would crush a human.
Risers are the vertical conduits connecting the seabed to floating production units. In deepwater developments, risers must accommodate the continuous movement of the host facility while maintaining structural integrity against fatigue, currents, and extreme pressures. Steel catenary risers, top-tensioned risers, and flexible risers each serve different applications, with selection depending on water depth, field conditions, and production requirements.
Flowlines are the horizontal pipelines transporting hydrocarbons across the seabed from wells to processing facilities. These can be rigid steel pipe, flexible pipe, or pipe-in-pipe systems designed to maintain temperature (critical for preventing wax and hydrate formation). Installation requires specialized vessels capable of laying pipe in a continuous operation while maintaining precise positioning.
The Vessel Fleet
The subsea umbilicals, risers, and flowlines (SURF) market is dominated by global engineering and oilfield service leaders such as TechnipFMC, Schlumberger, Subsea 7, Aker Solutions, Saipem, Halliburton, and Baker Hughes. These companies operate in a capital-intensive segment where high entry barriers stem from complex subsea engineering, stringent regulatory compliance, and the need for advanced installation vessels and deepwater expertise. Market competition is shaped by technological innovation, project execution capabilities, and cost efficiency as operators seek to reduce capital expenditure while maintaining reliability in harsh offshore environments. TechnipFMC and Subsea 7 lead integrated SURF solutions combining design, procurement, and installation.
Subsea 7's vessel fleet represents billions of dollars in capital investment. Each vessel is purpose-built for specific operations:
- Pipelay vessels like Seven Vega feature reel-lay systems capable of installing rigid pipe from massive spools
- Construction vessels provide crane capacity, diving support, and ROV deployment for subsea construction activities
- Dive support vessels enable saturation diving operations for work requiring human intervention
- Cable lay vessels install the submarine power cables essential for both oil and gas developments and offshore wind farms
Contract Types and Revenue Model
Subsea 7 operates under several contracting models:
EPCI (Engineering, Procurement, Construction, Installation) contracts represent the most comprehensive service offering, where Subsea 7 takes responsibility for the entire project lifecycle from initial engineering through final commissioning. These lump-sum turnkey contracts carry execution risk but offer higher margins when well-executed.
Day-rate contracts provide vessels and crews to clients on a time-based fee structure. Lower risk but also lower margins, these contracts provide base load utilization for the fleet.
Long-term frame agreements with major oil companies provide visibility and steady work flow for inspection, repair, and maintenance services.
IX. Playbook: Business & Investing Lessons
Key Lessons from Subsea 7's Journey
1. M&A as a Strategy for Scale
The subsea industry's economics demand scale. Geographic coverage requirements, fleet size needs, and bidding power on mega-projects all favor larger players. Both the 2011 Acergy merger and the pending 2025 Saipem combination reflect this imperative. The lesson extends beyond energy services: in capital-intensive industries with global clients, subscale operators face structural disadvantages that rarely resolve favorably.
2. Balance Sheet Discipline in Cyclical Industries
Subsea 7's survival through the 2014-2016 downturn—while competitors struggled—stemmed from maintaining financial strength during good times. The company entered the crash with strong liquidity and emerged positioned to invest while others were retrenching. For investors in cyclical industries, balance sheet quality during upcycles often determines which companies survive the inevitable downturns.
3. Technology as Moat
Subsea7's success has been built on developing and applying remarkable technological advances in diving, remote intervention, pipelay and marine construction.
The company's pioneering work through the years has created capabilities that competitors cannot easily replicate. ROV technology, saturation diving procedures, and installation techniques represent decades of accumulated expertise embedded in engineering protocols, trained personnel, and purpose-built equipment.
4. The Energy Transition as Opportunity, Not Threat
Subsea 7's renewables strategy demonstrates that energy transition creates opportunity for companies with transferable capabilities. The same harsh-environment expertise that enabled North Sea oil development now enables North Sea wind development. Strategic positioning for secular change—rather than denial or entrenchment—creates long-term value.
X. Competitive Landscape Analysis
Industry Structure
Subsea 7's competitors include major players like TechnipFMC, Saipem, and McDermott International, alongside smaller, specialized firms and emerging participants in the offshore wind market. Subsea 7 maintains a strong market position in the offshore energy sector, particularly in subsea construction and services. The company is a top-tier global contractor, holding a significant share in the SURF market and conventional oil and gas projects. Subsea 7 is known for its expertise in engineering, procurement, construction, installation, and commissioning (EPCI) of subsea field developments, specializing in complex deepwater projects.
Porter's Five Forces Analysis
Threat of New Entrants: LOW These companies operate in a capital-intensive segment where high entry barriers stem from complex subsea engineering, stringent regulatory compliance, and the need for advanced installation vessels and deepwater expertise. Building a competitive fleet requires billions in capital investment, and developing the engineering expertise and safety track record demanded by major oil companies takes decades. The threat of new entrants is minimal.
Bargaining Power of Suppliers: MODERATE Shipyards capable of building specialized offshore vessels are limited, and component suppliers for critical equipment (ROVs, diving systems, welding equipment) maintain significant negotiating power. However, Subsea 7's scale provides offsetting leverage.
Bargaining Power of Buyers: MODERATE TO HIGH Clients are among the world's largest companies—ExxonMobil, Shell, Chevron, Equinor, Petrobras. During downturns, their bargaining power increases substantially as contractors compete for scarce work. During upcycles, contractor leverage improves as capacity constraints emerge.
Threat of Substitutes: LOW Subsea oil and gas development has no current substitute. Onshore production and shallow water developments serve different resource bases. For deepwater developments, the SURF approach remains dominant.
Competitive Rivalry: MODERATE TO HIGH Subsea 7 consistently ranks among the top two or three global players in its core areas of expertise. This strong position is maintained alongside competitors like TechnipFMC and Saipem. The company's significant market share in the SURF market and conventional oil and gas projects underscores its competitive advantage.
Hamilton Helmer's 7 Powers Framework
Scale Economies: The fleet-based business model exhibits significant scale economies. Larger fleets enable more efficient vessel allocation, better negotiating position with suppliers, and ability to serve multiple geographies simultaneously.
Network Effects: Limited direct network effects, but the company benefits from ecosystem effects through its alliances (Subsea Integration Alliance with SLB and Aker Solutions) that create integrated offerings competitors cannot match independently.
Counter-Positioning: Subsea 7's early and aggressive investment in renewables positions it against competitors still primarily focused on oil and gas. This dual capability may prove increasingly valuable as clients themselves diversify.
Switching Costs: Moderate. Once engaged on a project, switching mid-execution is prohibitively disruptive. However, for new projects, clients regularly re-tender.
Cornered Resource: The company's vessel fleet and experienced workforce represent cornered resources that cannot be quickly replicated. Saturation diving expertise in particular requires years to develop.
Process Power: Decades of project execution have refined engineering and installation processes. The company's safety record and execution reliability create preference among risk-averse clients.
XI. Current Performance and Investment Thesis
Q3 2025 Results
Subsea 7 reported solid financial results for Q3 2025, highlighted by a 27% year-over-year increase in adjusted EBITDA, reaching $407 million. The company's revenue stood at $1.8 billion, driven by robust order intake and a record backlog.
Third quarter Adjusted EBITDA of $407 million, up 27% on the prior year period, equating to a margin of 22%. Solid operational and financial performance from both Subsea and Conventional and Renewables, with Adjusted EBITDA margins of 24% and 17%, respectively.
Backlog at the end of September was $13.9 billion, of which $2.0 billion is expected to be executed in the remainder of 2025, $6.0 billion in 2026 and $5.9 billion in 2027 and beyond. We anticipate that revenue in 2025 will be between $6.9 and 7.1 billion, while our Adjusted EBITDA margin is expected to be within a range from 20 to 21%. Based on our firm backlog of contracts for execution in 2026, we expect revenue to be within a range of $7.0 to 7.4 billion, while our Adjusted EBITDA margin is expected to be approximately 22%.
Order intake reached $3.8 billion in Q3, representing a book-to-bill ratio of 2.2x. This pushed Subsea 7's backlog to a record $13.9 billion, providing enhanced visibility for 2026 and beyond.
Bull Case
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Record Backlog Provides Visibility: With $13.9 billion in backlog and over 80% visibility on 2026 revenue, Subsea 7 offers unusual earnings predictability for a cyclical business.
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Margin Expansion Trajectory: Guidance for 22% EBITDA margins in 2026 (up from 20-21% in 2025) reflects mix-shift toward contracts with more favorable risk-reward profiles negotiated after the 2020-2021 trough.
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Saipem Combination Synergies: The merger creates the world's largest SURF contractor with unmatched geographic reach and fleet capability. Synergy potential from fleet optimization and overhead reduction is substantial.
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Dual Energy Exposure: Unlike pure-play oil services companies, Subsea 7's renewables business provides growth optionality regardless of oil price trajectory. The offshore wind market is expected to grow at 18-20% CAGR through 2035.
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Balance Sheet Strength: Net debt of $505 million (0.4x trailing EBITDA) provides financial flexibility for opportunistic investments and shareholder returns.
Bear Case
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Oil Price Sensitivity: Despite diversification, the core Subsea and Conventional segment remains tied to offshore oil and gas investment cycles. A sustained oil price decline would pressure backlog and margins.
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Merger Integration Risk: Combining two large organizations across multiple geographies creates execution risk. Cultural differences between the Norwegian/UK-centric Subsea 7 and Italian-headquartered Saipem could prove challenging.
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Renewable Sector Headwinds: Despite the strong pipeline, the report shows that macroeconomic headwinds, failed auctions, supply chain constraints and increasing policy instability, particularly in the US, have contributed to a downgrading of GWEC's short term outlook. The report warns that, whilst the fundamental case for offshore wind has never been stronger, the sector is facing an inflection point.
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Capital Intensity: The vessel-based business model requires continuous fleet investment. Aging vessels must be replaced or upgraded, consuming cash that might otherwise flow to shareholders.
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Customer Concentration: Dependence on major oil companies creates concentration risk. Any significant reduction in capital spending by key clients would impact backlog and utilization.
XII. Key Performance Indicators to Monitor
For investors tracking Subsea 7's ongoing performance, three metrics matter most:
1. Order Backlog and Book-to-Bill Ratio
Backlog represents contracted future revenue and provides the best leading indicator of earnings trajectory. A book-to-bill ratio above 1.0x indicates backlog growth; sustained ratios below 1.0x signal trouble ahead. The current backlog of $13.9 billion and recent book-to-bill of 2.2x in Q3 2025 represent exceptional performance.
2. Adjusted EBITDA Margin
Margins reveal pricing power and execution quality. The progression from 12% in 2023 to guidance of 20-21% in 2025 and 22% in 2026 demonstrates the benefits of both improved market conditions and disciplined contract selectivity. Sustained margins above 20% would indicate structural improvement versus cyclical tailwind.
3. Active Vessel Utilization
Fleet utilization directly impacts profitability given the high fixed costs of vessel ownership. Utilization in the low-to-mid 90s percentage range (as achieved historically during strong markets) indicates balanced supply-demand. Declining utilization would signal oversupply or market weakness.
XIII. Conclusion: Engineering the Future
From a 19th-century Norwegian shipping company to the world's premier subsea contractor, Subsea 7's journey embodies the transformation of Norway itself—from a small fishing nation to a global energy powerhouse. The company's heritage traces through the pioneers who developed saturation diving, the engineers who designed systems for crushing ocean depths, and the executives who assembled industry-defining combinations.
The pending Saipem merger represents the latest chapter in this consolidation story—creating an entity with €21 billion in revenue, €43 billion in backlog, and the world's largest fleet of offshore construction vessels. Whether this combination creates lasting value or proves unwieldy will depend on execution over the coming years.
What remains constant is the essential nature of Subsea 7's work. Somewhere in the world right now, a Subsea 7 vessel is laying pipe on the ocean floor, installing a wind turbine foundation, or maintaining infrastructure that keeps energy flowing to billions of people. It's work that happens far from public view, in conditions few can imagine, requiring capabilities that took decades to develop.
For investors, Subsea 7 offers exposure to both traditional energy and the energy transition through a company with demonstrated ability to navigate industry cycles. The record backlog provides unusual visibility, the balance sheet provides resilience, and the strategic positioning provides optionality. What remains uncertain—as always in cyclical industries—is whether current strength represents the early stages of a sustained upcycle or the peak before inevitable reversion.
The company's 170-year heritage, from Hamburg-Oslo ferry service to global energy services leadership, suggests an organization capable of adaptation. Whether the next chapter brings the transformational success of the 2011 merger or challenges yet unforeseen, Subsea 7 will continue doing what it has always done: engineering solutions in the most demanding environment on Earth.
Key Metrics Summary (Q3 2025)
Metric Value Market Cap ~$6 billion TTM Revenue ~$7 billion Q3 2025 Adj. EBITDA Margin 22% Backlog $13.9 billion Net Debt / EBITDA 0.4x Employees ~15,000 2026 Revenue Guidance $7.0-7.4 billion 2026 EBITDA Margin Guidance ~22%
Myth vs. Reality
Myth: Subsea 7 is purely an oil and gas company facing terminal decline from energy transition.
Reality: Through Seaway7, the company has delivered approximately 30% of global offshore wind capacity additions (ex-China) and maintains 15 years of offshore wind experience. The renewables segment achieved 17% EBITDA margins in Q3 2025.
Myth: The subsea industry has low barriers to entry.
Reality: Building a competitive fleet requires billions in capital, and developing necessary expertise takes decades. The top three players control approximately 40% of the SURF market.
Myth: The Saipem merger is primarily a cost-cutting exercise.
Reality: While synergies are important, the combination creates geographic and capability breadth neither company could achieve independently—particularly in the Middle East and LNG markets where Saipem has established positions.
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