Bourbon CEO Sees Oil Drilling, Maintenance Recovery in 2010

Bourbon SA, owner of the second biggest fleet of supply and crew ships for the oil industry, expects a recovery in drilling and production maintenance starting next year, the company’s chief executive officer said. “From what we are hearing from oil companies there will be a pickup in activity in the first half of next year,” Jacques de Chateauvieux said yesterday in a telephone interview. “This will concern exploration and development of new fields as well as maintenance of existing fields.”
Oil prices have risen almost 60 percent this year, after plunging more than $100 a barrel last year from a record, prompting some producers to cut spending plans. Bourbon, based in Paris, yesterday said profit rose 5 percent to 82.3 million euros ($117.9 million) in first half of the year and that it’s progressing to meet a 2012 target. Revenue rose 11 percent to 482.1 million euros in the period.
“Second-half results won’t be bad in absolute value,” the CEO said. “Growth won’t be as strong as the first half.”
A boom in deep-water exploration in 2008 boosted orders for the company, prompting it in February of that year to announce a 2 billion-euro program to expand its fleet of supply ships, underwater robots and bulk carriers by 2012.
Its so-called Horizon plan targets average annual sales growth of 17 percent in 2012, including 21 percent for the offshore unit and 7 percent for bulk transport. First-half sales in the offshore division rose 43 percent while revenue fell 55 percent at the bulk unit after a collapse in freight rates.
On Target
The company said that first-half and 2008 results will permit the targets to be achieved.
“We are in a slump in terms of freight rates,” de Chateauvieux said. “I can’t say whether the 7 percent target will be altered or not.”
In the offshore division, Bourbon has continued to take delivery of new vessels even as customers shorten the hiring periods. “The current market remains short term, with customers preferring hiring vessels for shorter contracts,” de Chateauvieux said.
The company’s vessel utilization rates and average daily rates fell in the first-half from a year earlier, according to a slide presentation. Bourbon said there’s a “risk of oversupply” in the number of vessels plying deep offshore oil fields as well as in Asia. The company said it’s counting on its modern, more fuel-efficient vessels to win customers.
The offshore division accounts for about 85 percent of sales, of which more than comes from Africa. Customers include BP Plc, Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA.
The company was founded in 1948 by sugar plantation-owning families on Reunion, the French island east of Madagascar.