SLB OneSubsea's Strategic Position in the Subsea Energy Transition: A Dual-Driven Growth Opportunity

The energy transition is no longer a distant promise but a present-day imperative—and companies that can bridge the gap between legacy hydrocarbon systems and emerging green technologies are poised to dominate the next decade. SLB OneSubsea, the joint venture between Schlumberger (SLB), Aker Solutions, and Subsea7, has emerged as a standout player in this dual narrative. Its recent engineering, procurement, and construction (EPC) contracts in Norway—spanning both carbon capture and storage (CCS) infrastructure and next-generation subsea production systems—underscore its unique positioning at the intersection of oil and gas modernization and climate-aligned innovation. For investors seeking exposure to the energy transition while hedging against the persistence of hydrocarbon demand, SLB OneSubsea is a must-watch asset.

The Dual Engine of Growth: CCS and Subsea Electrification

SLB OneSubsea's recent work on the Northern Lights Phase Two project and the Fram Sør all-electric subsea production system exemplifies its ability to address two critical pillars of the energy transition.

1. Carbon Capture and Storage (CCS): A Scalable Solution for Net-Zero
   The Northern Lights project, led by Equinor, Shell, and TotalEnergies, is a cornerstone of Europe's decarbonization strategy. SLB OneSubsea's EPC contract for Phase Two involves delivering two satellite subsea CO2 injection systems, expanding the project's storage capacity from 1.5 million to 5 million tonnes of CO2 annually. This expansion is not just a technical feat but a strategic one: it demonstrates the viability of standardized subsea CCS infrastructure, which reduces costs and accelerates deployment. The project is backed by a €1.5 billion EU grant under the Connecting Europe Facility for Energy (CEF Energy), a clear signal of public-sector confidence in its role in achieving net-zero targets.

By 2026, when the first CO2 injections are expected, Northern Lights will become a global benchmark for open-source CCS technology. For SLB OneSubsea, this project reinforces its leadership in a market projected to grow to $100 billion by 2035, driven by regulatory mandates and corporate decarbonization goals.

1. Subsea Electrification: Modernizing Hydrocarbon Production
   Meanwhile, the Fram Sør project—a 12-well all-electric subsea production system for Equinor—highlights SLB OneSubsea's role in reimagining traditional oil and gas operations. The system eliminates the need for hydraulic fluid and minimizes topside modifications, slashing emissions and operational complexity. By tying into the Troll C platform, which is powered from shore, Fram Sør achieves near-zero emissions, aligning with Equinor's net-zero roadmap.

This project is emblematic of a broader industry shift toward electrification, which is expected to reduce offshore emissions by 40-60% by 2030. For SLB OneSubsea, the Fram Sør contract is a proof of concept for a scalable model that could unlock marginal fields previously deemed uneconomical.

Why This Matters for Investors

SLB OneSubsea's dual focus on CCS and subsea electrification creates a compelling investment thesis:

• Diversified Revenue Streams: While the global oil and gas market remains volatile, the demand for subsea electrification and CCS is growing in lockstep with regulatory pressures and corporate ESG commitments.
• Strategic Partnerships: Collaborations with industry giants like Equinor and Shell, as well as EU funding, mitigate execution risks and ensure long-term project viability.
• Standardized Innovation: The use of modular, reusable components (e.g., subsea templates and injection systems) reduces costs and accelerates deployment—a critical advantage in a capital-intensive sector.

Risks and Realities

No investment is without risk. Regulatory delays, technical challenges in subsea electrification, and the pace of global decarbonization could temper growth. However, SLB OneSubsea's partnerships with state-backed entities and its alignment with EU funding programs provide a buffer against these uncertainties. Additionally, the company's emphasis on digitalization and automation—key enablers of cost efficiency—positions it to outperform peers in a resource-constrained environment.

The Bottom Line

SLB OneSubsea is not merely adapting to the energy transition—it is shaping it. Its recent contracts in Norway highlight a company that understands the dual imperatives of the moment: reducing the carbon footprint of existing energy systems while building the infrastructure for a low-carbon future. For investors, this duality is a powerful catalyst. As the world grapples with the tension between energy security and climate goals, SLB OneSubsea offers a rare combination of resilience and innovation.

In a market where the lines between traditional energy and renewables are blurring, SLB OneSubsea is a case study in how to future-proof a business. The question for investors is not whether to watch this space—but how soon to act.