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Acergy Feels Pressure on Pricing

14 June 2010

Oslo-listed oilfield services company Acergy said pricing pressures will continue to hit its margins throughout next year.

The outlook came as Acergy, which agreed last month to buy rival Subsea 7, posted second-quarter net income of $67.3 million, down from $76.9 million in the same quarter a year ago.

However, net operating income from continuing operations in March to May rose to $94 million from $81 million a year ago.

Chief executive Jean Cahuzac said: “We have delivered a solid quarterly performance driven by excellent project execution, additional variation orders on ongoing projects and strong conventional activity.

“We remain on track to deliver our 2010 expectations.”

Acergy said in February that revenues from continuing operations this year would be in line with last year.

Acergy said that stability in the oil price and strong tendering continued to underpin confidence but in the shorter-term the pricing environment remained “competitive”, particularly in the North Sea.

The company said it expects a number of major subsea umbilical riser and flowline contracts (SURF) that were delayed last year come to be awarded in the second half of this year, with installation on these starting after next year.