SBM Offshore: The Discreet Deepwater Tollgate

In the deep seas, where majors seek their most strategic barrels, SBM installs the bridge, collects the toll and leaves others to face the volatility of the subsurface. SBM Offshore's business model relies on FPSOs - floating units capable of producing, processing, storing and transferring oil or condensate at sea. These are naval factories anchored at depths of several hundred, or even thousands, of meters. Their operational lifespan typically reaches 15 to 25 years, following approximately three years of construction.

The company combines two approaches. On one hand, turnkey contracts, where SBM designs and delivers the unit. On the other, the more powerful model: lease-and-operate. Under this framework, SBM finances, retains and operates the asset, then leases it long-term to clients such as ExxonMobil, TotalEnergies, or Petrobras. This is where the investment case takes shape: 10 to 20-year contracts, visible cash flows, and a logic akin to a concession-based infrastructure.

An Industrial Machine at the Cyclical Peak

The figures speak for themselves. In 2024, SBM Offshore generated $6.111bn in revenue, up 35%, for an EBITDA of $1.896bn (up 44%). Net profit leapt 73% to $907m. For 2025, the group reports $5.06bn in revenue. The order book stands at $31.1bn, providing exceptional visibility in a cyclical industry. Activity accelerated further in 2026. In Q1, directional revenue climbed 216% to $3.489bn, driven by the turnkey division, whose revenues surged 359% to $2.879bn. The group raised its annual directional revenue target to over $6.9bn, up from about $6.5bn previously, while maintaining an EBITDA target of nearly $1.8bn. Directional net debt, meanwhile, fell 43% y-o-y to $3.2bn.

Fast4Ward: The Weapon of Mass Standardization

In a sector long characterized by bespoke craftsmanship, SBM has industrialized its advantage with Fast4Ward. Standardized hulls, pre-positioned critical components, and better-integrated modules: this program allows for a 6 to 12-month reduction in FPSO delivery times. The group has even recently ordered two additional hulls, a sign that demand remains robust. Guyana illustrates this lead. Following Liza Destiny, Liza Unity, Prosperity, ONE GUYANA, and Jaguar, SBM secured new FEED contracts from ExxonMobil Guyana for Longtail. The planned unit would be capable of producing 250,000 barrels of condensate per day, processing 1.2 billion cubic feet of gas daily, and storing approximately 2 million barrels.

A Stock that is Still Misunderstood

SBM indirectly handles approximately 2.7 million barrels per day, a volume comparable to that of a giant like TotalEnergies, but with a very different risk profile. The company does not sell the barrel: it sells the indispensable tool for its extraction. Shareholder returns reinforce the appeal of the case. With a raised dividend, a $150m share buyback program, and a $2.1bn shareholder return plan over 6 years—with upside potential mentioned by management—SBM is already rewarding its shareholders while building its next growth phase.

Risks exist: exposure to Brazil, dependence on Petrobras and ExxonMobil, and the complexity of joint ventures. However, these are mitigated by long-term contracts, prudent currency and rate management, and rare expertise. In the midst of an offshore cycle that could last several more years, SBM Offshore looks less like a classic oil stock and more like a global industrial concession, undervalued because it operates far from the coasts and far from the spotlight.