Photo by: Charles Hope
The name Saipem Canada Inc. doesn’t come easy for many Albertans, but it’s worth remembering. The company is one of the province’s hottest success stories in recent years.
“It’s been a very successful adventure,” says Piero Cicalese, president and chief executive officer of Saipem Canada Inc., speaking of the time from 2007—when he took on his present role—to today. “While other companies were laying people off during the financial crisis, we were hiring them. We are growing week by week.”
An accountant by background, 46-year-old Cicalese conveys a great deal of personal charm. A 16-year veteran of Snamprogetti’s parent organization, Saipem S.p.A, he has spent four years in Canada heading its Canadian and Mexican operations. A native of southern Italy, Cicalese studied accounting at La Sapienza, the oldest university in Rome.
Saipem’s roots go back to the 1950s, created by Italian oil major Eni S.p.A to look after its engineering, procurement and construction (EPC) needs for new developments around the world. Based in Milan, Saipem is now a publicly traded engineering giant—Europe’s largest oilfield service provider—with market capitalization of more than $20 billion. ENI now owns 41 per cent of the company.
As an international organization, Saipem specializes in remote and difficult locations. “For example, we built a very long pipeline in Sakhalin Island [in Russia’s Far East]. There is nothing there,” says Cicalese. “We’ve also worked in Iran and Central Asia, East Africa and West Africa. We have a lot of experience developing oil and gas projects in very remote areas.”
Because of the remoteness of its activities the company does a great deal of modularization—pre-fabricating projects as modules, then assembling them Meccano-style on location. “We are one of the largest companies around for this kind of work, at least in the petroleum sector.”
Cicalese notes that while it is relatively new to the oilsands, for 40 years the company has been involved in projects involving heavy oil.
Saipem Canada Inc. is indeed one of the newest large EPC players in Canada’s oilsands space, securing its first Canadian contract in 2005 in a joint venture with SNC Lavalin on the Canadian Natural Resources Limited Horizon project. Saipem Canada Inc. was responsible for building the hydrocracker for the Horizon upgrader, work valued at roughly $100 million.
“We were involved in all aspects of the project. The leadership was ours, and the project went quite well,” says Cicalese.
Since his team completed that project, there has been no looking back. There were two people in the company’s Canadian offices when Cicalese arrived in Calgary, he says. Today, “We have more than 350 employees. Most of them are engineers. We are growing, and most of our growth has taken place since the financial crisis.” Calgary is now the main office for the company’s North American and Central American operations.
Saipem acquired Snamprogetti in 2006, and retained that name primarily because the company had a foothold in North America already, and therefore some brand recognition. And in the form of a single letter, it is a brand Cicalese says is much different than its competitors.
“In Canada we are the only true EPC contractor. Most of our competitors are EPCM companies,” companies which add project management to their engineering, procurement and construction services. “We come from quite a different mentality. We come from a lump-sum background. If there are cost overruns, our competitors pass them on to the oil company. We absorb them. That’s part of the contract. So, there is much less risk to the client. We are one of the largest lump-sum contractors in the world.”
This approach is unusual in Canada, he says, “But it is quite usual in the rest of the world. We can do this because we have the largest capability of managing risk. There is risk on the table that has to be managed, and we are very good at that.... Quality doesn’t suffer. We have been 60 years in the business, and our record speaks for itself.”
Saipem Canada Inc. oilsands portfolio is building. Last December the company was awarded a $1-billion contract to construct the central processing facilities for Husky Energy Inc.’s $2-billion Sunrise steam assisted gravity drainage project, which will produce 60,000 barrels per day of bitumen after start-up in 2014. Cicalese calls it “one of the very few lump-sum EPC contracts awarded in Canada.”
By Peter McKenzie-Brown