Subsea7's African Subsea Play: A Multi-Year Growth Engine

West Africa’s deepwater oil and gas reserves are entering a golden age, and Subsea7 (SUBC:NO) is positioned to profit handsomely. With a pipeline of projects in Nigeria, Angola, and beyond—coupled with strategic partnerships and cost-effective execution—the company is a leveraged play on rising African subsea development. Investors should take note: this is a structural growth story with multi-year upside.

The West Africa Subsea Boom is Here

West Africa holds an estimated 35 billion barrels of undiscovered oil and gas reserves, the majority in deepwater fields. From Nigeria’s prolific Niger Delta Basin to Angola’s emerging Kwanza Basin, operators are accelerating subsea tiebacks and new field developments to tap these resources. Subsea7 is at the forefront of this surge, having secured contracts totaling hundreds of millions of dollars since 2022.

Recent Contract Wins: The Pipeline is Scaling

Subsea7’s project pipeline in West Africa is robust and expanding. Key wins include:
- Bonga North, Nigeria (Shell-led): A subsea Engineering, Procurement, Construction, and Installation (EPCI) contract awarded in 2024, valued at $300–500 million. This project involves constructing risers, flowlines, and umbilicals to tie back wells to the Bonga FPSO. Local Nigerian suppliers and subcontractors are central to execution, reducing costs and boosting ESG credibility.
- Agogo Integrated West Hub, Angola (Azule Energy): A $300–500 million deal secured in 2024 for installing 98 km of flexible pipes and subsea structures. Work is set to span through 2025, leveraging Subsea7’s Angolan fabrication hub (Sonamet) and regional expertise.
- Sanha Lean Gas, Angola (Chevron’s CABGOC): A $150–300 million 2022 contract for subsea infrastructure supporting Chevron’s Cabinda operations, now ramping into offshore execution.

Cost Discipline and Local Partnerships: A Competitive Edge

Subsea7’s execution model is a key differentiator. By prioritizing local suppliers, labor, and fabrication hubs (e.g., in Nigeria and Angola), it reduces costs and mitigates risks tied to supply chain volatility. This strategy also enhances its ESG profile, aligning with African governments’ demands for local content. For instance, the Bonga North project uses Nigerian subcontractors for design and fabrication—a move that cuts costs while building long-term relationships with regulators and clients.

Meanwhile, partnerships with majors like Shell and Chevron (via CABGOC) provide stable demand. Chevron, in particular, plans to invest over $2 billion in its West Africa assets through 2030, ensuring recurring work for Subsea7.

The Untapped Mauritania Opportunity: Early-Mover Potential

While Subsea7’s activity in Mauritania is not yet disclosed, the company’s regional expertise positions it to capitalize on the country’s emerging deepwater potential. Mauritania’s offshore blocks, such as the Tortue Ahmeyim gas field (jointly developed with Senegal), are attracting interest from operators like BP and Kosmos Energy. Subsea7’s proximity to Senegal and its track record in neighboring countries (e.g., Nigeria, Angola) create a first-mover advantage to secure contracts as Mauritania’s projects advance.

Valuation and Catalysts: A Buy with Multi-Year Upside

Subsea7 trades at just 6.5x 2025E EBITDA, a discount to peers like TechnipFMC (TFM) and McDermott (MDR). This valuation ignores three key catalysts:
1. Pipeline Execution: The Bonga North and Agogo projects will drive revenue visibility through 2026.
2. Mauritania Inroads: Early wins in the region could add $200–300 million+ in backlog by 2026.
3. ESG Tailwinds: Local content strategies and partnerships with ESG-conscious operators (e.g., Shell) will attract institutional capital.

Conclusion: Buy Subsea7 for African Deepwater Growth

West Africa’s subsea boom is no flash in the pan—it’s a decades-long play fueled by untapped reserves and rising demand. Subsea7’s contract wins, cost discipline, and strategic partnerships make it a prime beneficiary. With an underappreciated valuation and a pipeline set to grow, this is a buy for investors seeking exposure to Africa’s energy renaissance.

Risk: Project delays, commodity price volatility. But with deepwater demand set to rise and Subsea7’s execution track record, these risks are manageable.

Rating: Buy
Price Target: NOK 180 (20% upside from current price)