Good day and thank you for standing by. Welcome to the TechnipFMC First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Matt Seinsheimer. Please go ahead.

Good morning, and good afternoon, and welcome to TechnipFMC First Quarter 2021 Earnings Conference Call. Our news release and financial statements issued yesterday can be found on our website. I’d like to caution you with respect to any forward-looking statements made during this call. Although these forward-looking statements are based on our current expectations, beliefs and assumptions regarding future developments and business conditions, they are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. Known material factors that could cause our actual results to differ from our projected results are described in our most recent 10-K, most recent 10-Q and other periodic filings with the U.S. Securities and Exchange Commission and the French AMF. We wish to caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. I will now turn the call over to Doug Pferdehirt, TechnipFMC’s Chairman and Chief Executive Officer.

Thank you, Matt. Our first quarter as a leading pure-play technology and services provider to both traditional and new energy industries began with solid financial results, with notable achievements that uniquely position us in the growing markets we serve. This was reflected through strong operational execution and improving market backdrop that is poised to be even stronger for longer and continued development of real and material opportunities for TechnipFMC in the energy transition. Starting with the operational performance. We had an exceptional quarter in both operating segments. In Subsea, revenue grew sequentially in the period, driven by particularly strong execution of project backlog that offset the seasonal reduction in installation activity. In Surface Technologies, our international operations represented nearly 70% of total segment revenue, and we remain focused on delivering profitable results, supported by strong execution, both in the international and U.S. markets. In the U.S., we experienced sequential revenue growth despite the severe winter weather. Adjusted EBITDA from continuing operations totaled $165 million. Free cash flow from continuing operations totaled $137 million. We ended the quarter with net debt of $1.8 billion. And earlier this week, we announced the partial sale of our stake in Technip Energies for approximately $360 million. Inbound orders from continuing operations improved sequentially to $1.7 billion. Subsea inbound more than doubled sequentially to $1.5 billion, reflecting solid order momentum and a book-to-bill of 1.1. Integrated projects comprise nearly 40% of our Subsea order inbound in the quarter with particular strength in iEPCI orders and increased adoption of 2.0 technologies. During the quarter, we announced two separate iEPCI projects with Energean, building upon our previous experience with the Karish development and leveraging our iFEED capabilities to further extend our collaborative relationship to additional opportunities. We also received an iEPCI contract for the PETRONAS Limbayong project…

Thank you, Doug. Total company revenue in the quarter was $1.6 billion, with adjusted EBITDA of $165 million. Inbound orders were $1.7 billion. Total Company backlog was largely unchanged sequentially and stood at $7.2 billion at the end of the period. Backlog for subsea was $6.9 billion, of which $3.9 billion is scheduled for execution beyond 2021. We ended the quarter with cash and cash equivalents of $753 million and net debt of $1.8 billion. During the quarter, we recognized a gain of $470 million related to our equity ownership in Technip Energies. This relates primarily to the change in the fair market value of our remaining stake, which for this initial period reflects the difference between book value at the time of separation and the market value at quarter-end. Income per share from continuing operations was $0.95 per diluted share in the quarter. When excluding the impact of the change in fair market value of Technip Energies and other charges that netted to an after-tax credit of $0.99, the adjusted loss from continuing operations per share was $0.03. With the partial spin-off of Technip Energies completed during the quarter, financial results for Technip Energies are now reported as discontinued operations in our financial statements. For the three months ended March 31, 2021, the results of discontinued operations on the income statement include the historical results of Technip Energies prior to its spin-off on February 16, 2021, and all separation-related costs incurred for the transaction. Additionally, there were no assets or liabilities classified as discontinued operations on the balance sheet at the end of the quarter. Our investment in Technip Energies is now reflected in current assets at market value as of March 31, 2021. Now, let me turn to the segment results. I will focus on our sequential performance…

Thank you, Alf. In closing, our first quarter results provide us with a very strong start to the year in support of our 2021 commitments. Our strong order inbound clearly demonstrates that we continue to solidify our leadership position in conventional energy. Looking ahead, we expect robust and sustained activity across our businesses, supported by improving market fundamentals and our competitive differentiation. Our work to develop novel wind and wave energy and subsea hydrogen technologies through our Deep Purple project is progressing well. Strategic partnerships such as and Magnora and Bombora will further advance and accelerate our efforts. We remain committed to delivering a 50% reduction in greenhouse gas emissions by 2030. To help achieve this goal, we have converted an existing vessel, the Deep Arctic, into the world’s first hybrid dive support vessel. And we will continue to leverage our core strengths to create a unique position for TechnipFMC in the development of new energy sources, as we have done successfully in our conventional business. We are also very excited to announce that we will host an Analyst Day scheduled for the 16th of November, where we will showcase our strategic priorities and initiatives that support them. Operator, you may now open the line for questions.

[Operator Instructions] Your first question comes from David Anderson with Barclays.

Let me start off with a kind of a big picture question for you. With the business lines you’re in, I think you probably have more insight into global offshore production trends than just about anybody. Sorry to relive this with you, but subsea trees peaked at 550 in 2014, floating rigs at 260, and we’ve been at less than half those levels for several years now. Yet the forecast I see, it’s right for instance show global offshore production staying flat after 2025, and only have decline rates of about 5% in their models, and a surprising 4 million barrels of incremental new capacity coming on by ‘25. I mean I get it, these are long-cycle projects that take years to complete. But, shouldn’t the huge drop in rigs and trees start manifesting in production soon? I’m really having trouble tying the two together, really like to get your opinion, how you’re thinking about kind of global offshore production over the next, let’s say, five years?

Sure. And David, when you say manifest in -- you’re speaking of increased activity, you said production, but activity...

Well, I’m just looking at the production. I’m just tying -- yes, I’m just tying together the two of kind of your activity and the production, and why they’re not really -- why we’re not seeing that kind of showing up in the numbers? And when you do start seeing it in the numbers, and when really kind of offshore really starts to come down?

Sure. And I just emphasize that because of the point that you made in your question, which was these are long-cycle projects. So, there is a time lag between the activity and the actual increase in production. So, look, let’s just kind of break it down a little bit. Obviously, our Company has experienced not only the benefit of an increase in activity but a significant increase in our market position, if you will. That’s a result of bringing to the market something new, something innovative, both in terms of technology, Subsea 2.0 as well as in terms of a unique commercial model, iEPCI or the integrated project, where we’re the only single entity that can provide such a combination. This was manifested in the recent PETRONAS Limbayong award. This is PETRONAS’ first deepwater. They do a lot of offshore, but this was their first deepwater project, and they saw the benefit of both Subsea 2.0 and iEPCI, and if you will, combined into an iEPCI 2.0 award that went to our Company. So, we’re seeing certain activity that, let’s say, the rest of the market is not experiencing. We’re very privileged and very grateful for that. In addition to that, as I mentioned in my prepared remarks, we do see an increased level -- well, we’ve been -- I mentioned back in 2019 that we were seeing an increased level of front-end engineering of work or iFEED studies as well as traditional feed studies, front and engineering and design. And then again, in last year, in 2020, I emphasized how we were seeing a further increase in iEPCI studies. As mentioned at the time, they’re 9 to 18 months, depending upon the project and the customer at what time they can move forward to the FID phase. So, we’re…

Got you. And then -- so it was obviously impressive subsea orders this quarter. We’ve also heard some rather positive comments from some of the service guys. And as you’re starting to kind of ramp up, obviously, your iEPCI model seems just perfectly suited for this kind of market. I guess, if you’re looking out, I mean, -- I give you a lot of credit for having the confidence kind of looking out to ‘22. But kind of looking at the next several years, I guess the question is, do you think there is enough opportunities out there in this type of business? If we kind of stay on this level and maybe even ignoring some of the bigger projects, do you think that the subsea business overall can kind of get back to those double-digit year-on-year growth? And do you think that’s enough -- I’m talking in the next couple of years here, I’m not pushing it on near-term guidance, but do you think that’s enough to get subsea margins back into that kind of 13%ish range kind of where they were before that whole peak that we saw in the 13s, 14s?

Yes. Well, we provided our guidance for this year, and we obviously started off with a very good first quarter in our subsea margins. Obviously, subsea revenue was very strong. So, we would expect, as we continue to move forward with the increased level of activity that we -- that you should expect, and we expect that we would deliver an increasing margin as well. So, if you look at our margin guidance right now, we’re not far from your target. So, I think that when you put that target out there for the next two or three years is I think how you framed it, I don’t think that that’s an unrealistic expectation at all.

Your next question comes from Guillaume Delaby with Societe Generale.

One question for Alf. Following the disposal of at least a partial spin-off, how should we think about your working capital? How should we model? Can you provide us maybe one, two or three, I would say, guideline, which would make sense for us?

Yes. Thank you for the question. So, when we think about working capital, obviously, first of all, we acknowledge that we had some working capital inflow in this first quarter. And it’s not unusual that we’re going to have some quarters that have some inflow and some outflow that varies. Over the period of a year, we’d like to think that it nets out to some degree. But if we specifically look at the forecast for the rest of the year, we are confident in that we will be close to working capital neutral. So, I mean, I would always start with a starting point to working capital neutral. And then, from that point, we will advise and forecast if there are unusual items that impacts beyond that. So, when you look out for the full year this year, we expect to basically keep the working capital favorability we recognized so far in this first quarter, be more neutral for the rest of the year and end up with a free cash flow that is in line with our guidance.

Your next question comes from Marc Bianchi with Cowen.

So, Doug, you mentioned on the Subsea performance in the first quarter was strong, and it sounded like there was some manufacturing throughput that helped there. And certainly, as we progress from here, I would suspect that that stays at a similar level or improves, and then you get a seasonal recovery in services. So, just based on that understanding, I would think that your margins would be biased higher in the second and third quarter from where you were in the first, just curious if you have any commentary around that.

Sure, Marc. As you know, we give annual guidance. We try to avoid getting into the quarterly guidance routine. But, I would not disagree with your thought in terms of there is certain efficiencies that we’re seeing is obviously recovery from everything that we went through and our supply chain went through in 2020. We obviously have some very good, solid backlog. I mentioned this last quarter, maybe even the quarter before, and we’ll reemphasize it because it’s really quite important and I think, unique to our Company. Our margins and backlog are improving. So, it’s quality, not quantity or quality and quantity in our case. So, that’s very, very important as well as we continue to look forward. That being said, we did -- this is a projects type business. So, when you have increased performance and execution performance or cadence, that accelerates some milestones, but it doesn’t necessarily repeat every quarter because you achieve those milestones. Those milestones happen on an intermittent basis. So, I just want to caution that we just don’t draw a straight-line from south to north. But understand that the business is performing very, very well. I’m very proud of the work that the women and men are doing and have done throughout a very difficult 2021 and now really seeing the potential of this Company as we move forward as a standalone pure-play.

The next question I had was a bit longer term and related to Deep Purple. You mentioned technology there. And my understanding of Deep Purple is it’s perhaps more of a concept at this stage than actual technology development. I suspect you’d disagree with that. And I’m curious on your on sort of what tangible technology you have that’s being developed towards that project? And then also, if you could comment on the agreement with Magnora, and sort of why Magnora versus perhaps some other offshore developers that could be out there?

Sure. Two great questions. On the first, I’m going to -- it’s not that I disagree with you. Certainly, it’s a unique concept. And secondly, yes, we do have technology to support it. Bear in mind that we’re talking about a substance, if you will, that is very difficult to handle, both from a corrosive point of view, but also from a stability point of view. So, there’s a tremendous amount of technology development that has been going on for four years, Marc. We didn’t talk about this four years ago because we like to have something real that before we start talking about and, if you will, marketing things. And it was important for us to develop this. It’s been a long process. Yes, it started as a concept over four years ago, but we’ve been well into the technology that’s called the TRL process, where you’re actually qualifying your products, where you’re qualifying their capabilities, ceiling surfaces, containment, et cetera, to be able to operate not only with a particularly challenging substance, hydrogen, but also to do it in a particularly challenging environment, which we know very, very well, which is subsea. So, if you’ll allow me to kind of throw out a little marketing opportunity here, we hope that you’ll participate in November in our Analyst Day because that will give us the opportunity to really showcase the technology, and that’s -- will be a big portion of that Analyst Day. So, I’ll leave that where that is for now, but progressing quite well. And we’re well into multiple phases on the Deep Purple project. Magnora, thank you for asking. Look, we’re very pleased to partner with Magnora. We felt it was -- for us, it’s finding the right relationship where we can work well together, collaborate well together. That’s what our Company does. We build deep, intimate client relationships. We work with clients for 20, 25 years on an exclusive basis in our traditional business, and we would expect to do the same as we move into the new energies. So, we spend a lot of time in building that relationship before just jumping into a partnership. That being said, we are likely to have other partners in offshore wind as well. So, we felt Magnora was the right partner at this time with a good opportunity set that we’re very proud to be part of and to work with, but it doesn’t mean that there won’t be other partners, just like in our traditional business, where we have multiple partners and multiple relationships.

Your next question comes from Amy Wong with UBS.

A couple of questions from me. The first question is, I think one of the kind of notable data points for this quarter is in your subsea backlog. It seems to have had a pretty decent increase of inbound converting into 2021 execution. So, is that a fair observation? And if yes, is there any kind of trend to call out in terms of the types of projects your clients are moving forward with? Maybe there’s a bit of pent-up demand that seems to mean like the inbound is converting to revenue in a slightly shorter timeframe than usual?

This is Alf here. I can take that one. Let’s say this, every quarter, there is some movement in the backlog scheduling. And in this case, you are absolutely right that there is some accelerated demand in our execution. So, we are able to capitalize on that. And that overall is driving us in terms of our look now at the full year guidance for our revenue to trend a little bit more towards the high end of the guidance range for revenue in Subsea. So, overall, that’s a positive picture.

And Amy, good afternoon. I’ll add to that. In terms of -- you were asking, was there any change and, if you will, the client mix or the project mix? Clearly, as clients move to optimizing the utilization of their installed offshore infrastructure, in other words, doing more tiebacks or more brownfield opportunities, iEPCI and Subsea 2.0 is -- I mean, it’s just the right thing at the right time. So, we’ve already demonstrated now for years our ability to be able to take a 20-month project and deliver it in 14 months installed commission on the seabed. We were working all through 2020, during the pandemic, we were working very closely with almost all of our major -- all of the major subsea players, almost all of them, had programs underway to really study what additional resource could be tied back to their infrastructure, potentially their own or potentially that of another oil Company. And we’ve been part of that discussion. We’ve been, in some ways, part of -- in working with multiple different oil companies to bring that to a reality because we have this unique solution where we can go out and deliver installed commission on the seabed in half the time as the conventional market or the competition. And that will drive, if you will, a quicker acceleration or conversion between the inbound and the revenue and the profitability as we see a greater mix of those type of projects in our backlog.

Got you. Okay. My second question just relates to your announcement to host an Analyst Day in November. Now, quite a far -- put a long way away, but just wanted to understand is FTI kind of posted spinning off energy. Are you guys pursuing a bit more branch review of the strategy? And should we expect some big strategic update in November, or are you characterizing this slightly differently is only just -- or rather more focused on just looking at the technology?

Well, Amy, let me start by saying we know you all are under a high demand and hugely popular, and that is a busy time of the year, both in terms of conferences as well as in terms of potentially other people having Capital Markets Days or Analyst Days. So, we just wanted to get on your calendar early, and we certainly hope that you’ll be able to join us. In terms of the structure, sure, you should expect that we’ll be talking strategy as well as technology. We’re a company that drives change. We’re a company of innovation. I think we continue to surprise to the upside and not only surprise the upside but to deliver against what we state. So, we’re certainly excited for it. We think it will be a time well spent, and we hope that you’ll be able to join us.

Your next question comes from George O’Leary with TPH & Company. George O’Leary: Free cash flow guidance increase was very nice to see. I was just wondering if you could frame the low end and the high end, what drives kind of the low end or the high end of that range.

Sure. So, first of all, free cash flow guidance increased. And as we -- I was trying to be very clear in my prepared remarks, this is a direct result of the separation-related expenses that we had previously assumed would be in our continuing operations that are now in our -- were recorded in discontinued operations in the first quarter. But overall, if you’re honest, we are -- if I’m honest, there is mostly the variations will be around working capital timing. So, for the most part, even though we are confident in that we can deliver around a neutral working capital for the remainder of the year, there is still some risk there. Can we manage other pieces of the free cash flow, such as capital expenditures? Yes, possibly. So, there are some dynamics in that. We’re obviously demonstrating here some of our belief in that our guidance in terms of the revenue potential in Subsea and even to some degree, the margin potential in Surface so far can drive some favorability. So, overall, we’re looking favorably at our ability to deliver the full year free cash flow forecast as we have guided to. George O’Leary: All right. Very helpful. And then, just a bigger picture question with respect to the renewables or energy transition side of the equation. Just curious if you could frame the pathway or glide path to that side of the business becoming a material portion of revenue? And then, maybe what’s the nearest-term opportunities are comprised of, whether it’s offshore wind, floating solar, tidal wave plus wind, all three? Just any color on the glide path and the composition?

Yes. George, a very good question, one that we spend a lot of time on and one that we -- I alluded to or spoke to in the prepared remarks because I think it’s really, really critical. One, we’ll certainly be talking more about in November at our Analyst Day, but just to foreshadow it a little bit. First and foremost, our new energy strategy is around four pillars. That’s offshore wind, particularly floating wind. And again, we believe that will comprise 80% of the total offshore wind. So, we’re not really chasing the fixed wind. It’s very fragmented. There is no integration and there is very little technology other than the turbine -- provided by the turbine manufacturer. So, just to chase that to get short-term vessel utilization and to call that new energy or renewables revenue, I’m not really doing anything, right? I’m just using my boat for a different application. So, we’re not looking at it that way. We’re looking at it as what can we bring -- just like we do in the conventional energy, what can we bring to differentiate our Company from a technology and from an integrated offering. So, we’ll approach this very differently. We believe it will allow us to generate the type of returns that would be acceptable to you and to our shareholders versus what is available in, if you will, just selling a vessel at a lower day rate in the renewables market -- fixed -- I’m sorry, fixed wind market today. So, that’s what we mean about playing the long game. We did the same thing, if you remember, in our traditional business back in ‘17 -- or ‘18 and ‘19, we were very-disciplined, and we didn’t just chase activity. We said iEPCI, we believe, was going to…

Your next question comes from Michael Alsford with Citigroup.

I’ve got a couple, please. Firstly, if I could just lead off, you’ve done a great job driving greater efficiency through the business. But, I guess following separation, are there any significant areas, Doug, where you see the ability to reduce costs further across the organization?

Well, Michael, as you know, this management team, there’s a relentless pursuit for operational improvement, and I can’t say enough about the leadership throughout our organization, of our engineering, manufacturing and supply chain as well as in the operating segments and just across the organization. The word we use in this organization is simplicity. Let’s remove the complexity. Obviously, that -- we benefited from that now as a standalone pure play company to remove some of the complexity and really be focused. And we’re driving that through everything that we do. So, Michael, I’m not going to announce a big massive cost reduction program or something like that. But, you should rest assured, every single day, we’re looking to make the organization more efficient, which creates, by the way, a better work environment for our employees by removing complexity and costs.

And just a quick follow-up on the cash flow. I’m just wondering is there any specific inflows within the quarter such as unwinding provisions or so tax rebates that help drive the good free cash flow result, or is it simply just the flow of milestone payments on contracts during the quarter? Thanks.

Yes. So, you’re talking about the first quarter impact here?

Exactly, yes. I was just wondering whether there’s anything specific in that quarterly working capital inflow that helped drive free cash flow higher?

Yes. So, thanks for the question. Yes. There was some items in the first quarter that were beneficial. We had a settlement that went into the first quarter. We did have some other negative items as well. But overall, that settlement benefited the free cash flow for the quarter.

And just roughly how much was that?

Yes. Michael, let me just add to that. This was -- there’s always -- there’s what’s contributed from operations, and there’s always other things that come in and out of the cash flow. But, these were all part of our forecasted cash flow. So nothing out of the ordinary or unexpected that created the positive momentum, just good, solid execution on the cash flow side.

Your next question comes from Waqar Syed for ATB Capital Markets.

Thanks for taking my questions. Two questions. First one, you’ve made a comment that you see a sustainable, long-term kind of growth activity offshore. And we’ve seen in the industry a lot of rationalization of employee base. And the average employee that you need for Subsea is a lot more sophisticated and trained. Do you have the right people and the right number of people to be able to efficiently manage that growth that could be a multiyear kind of up-cycle?

Thank you, Waqar. Look, we all have biases. There’s unconscious and conscious biases. I’m going to be very clear, this is a conscious bias. I believe we have the best people. And I mean that from my heart. What they have demonstrated and what they have delivered on a consistent basis, particularly during the last year is just nothing short of inspiring. So, look, we -- as we’ve made adjustments and the adjustments we had to make were unfortunate, we have done everything we can to protect the talent in the organization, and not only to protect, but to continue to provide them opportunities for development and to further progress their career within our Company. You raise a very valid point though. The further you go into the supply chain, you sometimes find smaller companies and you sometimes find companies that are more codependent on one or two customers. In this case, we would be a customer versus a contractor. And so, we also work very closely with our key suppliers. And we shifted work around just as our customers did for us. Some of our customers sat down and took work from the competition and gave it to us because they said they knew who they wanted to work with when it was all said and done, and they wanted to make sure that we had the volume that would help us through a difficult year last year. So, we did the same with our suppliers. That being said, as we -- any growth cycle does create pinch points. But we’re doing our best to go in eyes wide open, and we’ve done a lot of work to protect and not only protect, but to motivate and make sure that our workforce is well prepared to deliver. I will put in a plug, if you will, for the way that we do our business. iEPCI is a much more efficient way to do business in terms of assets, particularly human assets as well as Subsea 2.0 in terms of the manufacturing roofline and the individuals required. So, it’s not just an upturn. We’re going into this upturn very different. We’re going in with the next-generation of subsea equipment that now represents, as I said, a significant portion of our total work now. So, it’s a very different recovery for us that we believe we are well prepared for, Waqar, but most definitely, eyes wide open and acknowledge that there will be pinch points as the growth continues.

Thanks, Dough. And if I may squeeze in another question. Before you -- before the separation of Technip Energies happened, you had a set of assumptions about how the interaction with your customers and employees and with investors change following the separation, and not just interaction, but their behavior and how it would help FTI. Now, the separation has happened, how is the reality being compared to your set of assumptions going into the separation?

In regard to customer relations, customer relationships?

That’s -- yes, I was -- all three kind of customers, employees and investors starting with customers, you had a view that you could maybe get better. Maybe there will be some uptick in kind of revenue, either for Technip Energies or for you are following a separation, and if that kind of -- are you seeing some of that?

Yes. What’s clear, Waqar, is -- and I kind of alluded to that just a minute ago, so I won’t go back through it. But our customers -- we have -- we’re honored to have the deep intimate relationships that we have with many of our customers. They work with us differently than they work with many of the others in their supply chain. That’s not a given, that’s earned over time, based upon performance and trust and transparency. And it’s obviously stronger as a pure play only because you -- the HoldCo had two very different models with very -- two very different contractual approaches. So, this, if you will, allows that increase in the intimacy. And I do believe that we are benefiting from that. And it’s not just what I believe, it’s -- we’ve announced new -- many -- several new relationships over the past year, and we’ll be announcing even new relationships this year, most of which are exclusive to our Company. In terms of the employees, we obviously have an opportunity now to be more focused, spend more time, be more visible. Some of the bigger projects that we were doing in the past required an enormous amount of management bandwidth, focus and attention, and we now can spread that more equitably across the organization, which I think is the right thing to do. And in terms of shareholders, I hope we demonstrated in Q1, the value of an independent company.

And our last question comes from Bertrand Hodee with Kepler Chevreaux.

Yes. Thank you for taking my question. One on Mozambique. Back in 2019, you won a substantial contract, $1.1 billion, for the subsidies of Mozambique LNG. Can you give us an update obviously following the force majeure? Do you see any direct impact? And if you can share any color or especially what is left in the backlog from this contract?

Sure, Bertrand. Thank you very much for the question, because I think it’s important. And I want to clarify some of the things that have been written that were incorrect. So, bear in mind that, yes, we announced this as a substantial award, meaning plus $1 billion. The recognition, a typical project of that size would -- the revenue would be recognized over plus or minus a five-year period. So, you can kind of do the math, if you will, assuming it was linear. It’s not linear, but you can get an idea of kind of the annual impact, plus or minus. I will tell you right now, we are only beginning to have discussions with Total. Total is a very serious customer. Total is a serious partner of ours. We have the deepest respect for Total. And the fact that Total is making decisions based upon the health and wellbeing and security of their personnel and their contractors’ personnel, including us, we deeply respect. Second point, this -- we are an offshore company. Our scope is offshore. We have no in-country exposure. All the work that we’re doing at this point is the manufacturing. We are well into the manufacturing of the subsea equipment. So, that will continue to go on for some time. We are progressing on plan, on schedule, and everything is going quite well. And it’s being done thousands of -- 100, well -- yes, tens of thousands -- thousand -- a long way from Mozambique, I haven’t done the calculation. So, yes, just realize, we’re not doing any -- we’re not doing any onshore infrastructure, if you will. We’re an offshore company. And the work that we’re doing right now is in the manufacturing phase, which is being done far away, away. It’s progressing very,…

Okay. Crystal clear, Doug. So to summarize, the only risk we can see is a delay in the offshore campaign installation in terms of schedule of the contract?

Yes. That potential exists. But again, we’ve been given no -- there’s been no decision made at this time. We’re working closely with Total.

I’ll squeeze another one, another region. Can you give us a feel of what you see in terms of activity in the U.S. Gulf of Mexico after, I would say, the election of Joe Biden? Do you see less traction? Do you see -- and do you see into iFEED, I would say, package of project, do you still see a traction in this region?

Yes. Like in many mature markets, the Gulf of Mexico being a very mature market for subsea. There’s a significant amount of infrastructure, operator-owned infrastructure that is not operating at capacity today. Kind of globally -- a rough figure globally is most offshore infrastructure on average is only operating at about 60% of nameplate capacity. So, therefore, there’s an opportunity to bring additional hydrocarbon into that facility to be processed without any significant increase in capital costs in terms of infrastructure. So, hence, brownfield tieback opportunities. As I was talking to Amy, we’re uniquely positioned. We’ve been working with many operators in the Gulf Coast, same idea. Let’s look at your infrastructure, what assets you have around, what leases you have around your infrastructure, what other leases could potentially be tied back. We have new technologies out there included pipe and pipe electric trace heated a pipe that allows us to significantly increase the tieback radius by up to 4 times, 4 times greater. So, the circle that you would have drawn just two years ago around the infrastructure is the radius is now 4 times larger. And so, there’s a lot of things that we’re going to be able to do. It will drive our subsea processing business as well in terms of subsea boosting. So, it’s exciting opportunities for us. And yes, the Gulf of Mexico, there’s lots of activity going on. I would not be surprised to also see potentially a greenfield project, a new greenfield hub being announced in the Gulf of Mexico this year as well.

Thank you. I would now like to turn the call back over to Matt Seinsheimer.

This concludes our first quarter conference call. A replay of the call will be available on our website beginning at approximately 8:00 p.m. British Summer Time today. If you have any further questions, please feel free to contact the Investor Relations team. Thank you for joining us. Operator, you may now end the call.

This concludes today’s conference call. Thank you for participating. You may now disconnect.