With a robust E&P capex backdrop, we
prefer exposure to ‘long-cycle’ offshore
activity – subsea, FPSO, construction.
Main risks in 2008 are project execution –
not credit supply or demand growth
 New risk profile: higher market risk and
funding costs cut c10% off target prices;
value screens and mid-cycle scenarios
show upside potential at Aker Kvaerner,
SBM Offshore, Seadrill and Technip
 We upgrade CGGVeritas to OW from N
and Saipem & Fugro to N from UW; we
remain OW on SBM Offshore & Technip
and add volatile flags to OW ratings on
Aker Kvaerner and TGS Nopec
Moving to the next leg of the offshore cycle
We are moving into a broad multi-year peak of new offshore
vessel arrivals – drilling rigs, installation vessels and supply
boats. This should help ease the bottleneck that has held
back activity, but numerous operational challenges lie ahead.
We prefer exposure to safer long-term growth trends such as
in deepwater/subsea technology and exploration.
Screening for value and cycle risks
Our valuations now reflect a higher market risk, higher
corporate debt spreads and lower peer group multiples,
taking on average around 10% off our target prices. Our
value screens highlight the potential at SBM, Seadrill and
CGGVeritas, and our mid-cycle scenarios see considerable
upside potential at SBM, Aker Kvaerner, Technip and TGS
Nopec, even if margins return to more normalised levels.
Key ratings and rating changes
We upgrade CGGVeritas from Neutral to Overweight (TP
EUR205 from EUR220) and Saipem (TP EUR26) and Fugro
(TP EUR51 from EUR58) from Underweight to Neutral. We
add volatile flags to our Overweights on Aker Kvaerner (TP
NOK190 from NOK220) and TGS Nopec (TP NOK115 from
NOK130) to reflect share-price volatility versus their peer
groups. We lower our target prices for Technip (EUR71 from
EUR77), PGS (NOK140 from NOK160), SBM Offshore
(EUR28 from EUR35) and Seadrill (NOK150 from NOK160).

目录

Investment summary 3
Macro – what’s driving the
E&P capex cycle 5
Micro – what’s driving oilfield
services 11
Oil services – summary of
valuations & risks 44
Disclosure appendix 54
Disclaimer 59