Saipem Poised for Middle East Repair Work After Iran War

(Credit: Saipem)

Italy's Saipem can win contracts for post-Iran-war repair work in the Middle East by leveraging its long-term relationships with customers in the region, the energy services group's chief executive said on Wednesday.

The cost of repairing damage resulting from the war and restoring energy-linked infrastructure could hit $58 billion, Rystad Energy said in a recent report, with oil and gas facilities alone facing a potential bill of $50 billion.

Chinese and Indian companies are expected to be in the running for those contracts. But Saipem's Alessandro Puliti, speaking in a post-results conference call, said the Italian firm was uniquely qualified to take on repair projects in the region.

"There will be competition, but we have to recognise that we have built several of those facilities in the past ... So this gives us really an advantage in terms of knowledge and understanding of the plant," he said.

The commodity price surge triggered by the war will, meanwhile, likely boost future investments in the oil and gas sector, Puliti predicted, adding that projects for new infrastructure aimed at diversifying oil and gas supply could also emerge.

The crisis, however, could negatively affect Saipem's activities by blocking the transport of materials and key components while increasing costs due to a potential rise in inflation.

"We will start to see some impact if Hormuz does not reopen by late May and July ... that's when we have some important crossing of material in and from the Gulf," Puliti said, referring in particular to the transportation of components for two projects in Qatar.

Saipem confirmed its financial targets for 2026 provided shipping flows are restored within weeks.

The group reported adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 434 million euros ($509.69 million) in the first quarter, up 24% year-on-year but slightly below an analyst consensus of 447 million euros.

($1 = 0.8515 euros)

(Reuters - Reporting by Francesca Landini; Editing by Joe Bavier)