Two Italian firms land billion-dollar contracts serving Middle East clients

Fincantieri will build combat ships for Saudi Arabia and Saipem's drilling arm will provide onshore rigs for regional clients

The Fincantieri Marinette Marine shipyard in Wisconsin where four new ships destined for Saudi Arabia are to be built. Image courtesy of Fincantieri

Two Italian firms on Friday secured contracts in the Middle East worth billions of dollars.

Italian shipbuilder Fincantieri Marinette Marine said it was part of a consortium that secured a multi-billion dollar order for the construction of four multi-mission surface combatant ships destined for Saudi Arabia.

The shipbuilder said the consortium, which is led by Lockheed Martin, secured the contract from the US Navy under its Foreign Military Sales programme. Fincantieri's part is worth about $1.3 billion (Dh4.77bn) and will be carried out at the company's shipyard in Wisconsin.

“Orders such as these, besides being very significant from an economic point of view, mark themselves for important industrial aspects," Fincantieri's chief executive Giuseppe Bono said in a statement, adding that it demonstrated the reputation the company had gained in the "very complex" US market.

"It also is an acknowledgement of the strategic, technological and management skills that Fincantieri is able to express."

Fincantieri is one of the world's biggest shipbuilders, with more than 230 years of history and 8,600 employees. The company secured new orders of €6.6 billion (Dh27.1bn) in the first six months of 2019 as revenue grew 12 per cent to €2.8bn, despite profit declining 20 per cent to €12 million. The company said it has invested more than $180m to modernise the Wisconsin shipyard since 2008. It also owns two other yards in the Great Lakes region.

Also on Friday, Italian oilfield services company Saipem announced it had secured onshore and offshore drilling contracts worth about $1.7bn.

The onshore drilling contracts relate to 19 land rigs that are being used in the Middle East, although the company did not indicate the value of the contracts nor who the rigs are being supplied to. The contracts run from three to 10 years. The company also said new contracts and extended deals had been signed for onshore contracts in Bolivia, Peru and Romania, while offshore deals cover contracts in Norway and Angola.

“The award of these contracts proves the solidity and reliability of the operational performance of our Drilling Divisions and further strengthens Saipem’s long-time presence in strategic areas of the world," said the company’s chief executive Stefano Cao.

Saipem has already secured a number of other deals in the Middle East this year, including an agreement with Plambeck Emirates in July to develop a 500 megawatt offshore wind farm in Saudi Arabia, and a pair of engineering, procurement and construction contracts worth $1.3bn in April from Saudi Aramco.

In the first nine months of 2019, the company's backlog grew by 57 per cent year-on-year to €19.8bn as revenue climbed 11 per cent to €6.75bn.