Industrial Model

EPC/EPCI Process and Saipem Industrial Model

Since the '70s and '80s, when the oil business was run mainly by international oil companies, the projects in the oil & gas industry have become larger and riskier, thus more technologically and financially challenging. The so-called ‘best-in-class’ strategy, that implied that on a single project there could be several relatively small ‘best-in-class’ contractors and suppliers, has been gradually substituted by a new approach.
The growing importance of national oil companies, which prefer large EPC/EPCI contracting strategies, contributed to establish a new contracting model where a single contractor assumes the overall responsibility to perform all the different phases of the project: normally referred to as EPC - Engineering / Procurement / Construction - project in the onshore business and EPCI - Engineering / Procurement / Construction / Installation - project in the offshore business.
While these large EPC/EPCI contracts are more efficient, permitting more investment in improvement and in local content, they are also much more risky. Many large contractors have suffered, especially those that have not invested and are therefore out of control of the EPC/EPCI process.
Saipem believes that EPC/EPCI is the most efficient process as long as the contractor has an industrial model that allows it to perform or control, in-house, the most critical activities: Engineering, Construction and Installation; also local content is an essential part of the model in most world areas.
Saipem has built a strong EPC/EPCI industrial model which allows the Company to establish itself as a world leader in the oil & gas contracting services sector, both onshore and offshore.