TechnipFMC plc

Overall Outlook - The global economy is expected to show moderate growth in 2026, led by India, China, and the United States. Resilient consumer spending and continued investment in artificial intelligence (AI) should be essential drivers of economic growth. Military activity in the Middle East, shifting trade and inflation dynamics, more restrictive monetary policies, and an uneven global recovery present risk to the growth outlook.

Persistent geopolitical conflict underscores the strategic importance of energy security worldwide. The current conflict in the Middle East also demonstrates how quickly regional disruptions in the production and transportation of oil and natural gas can impact the balance of global supply. We believe the significant impacts to both security and energy supply resulting from the conflict are likely to have lasting effects on the perceived risk assigned to the region.

Over the last several years, offshore markets have attracted a growing share of global capital flows, driven by much-improved economic returns and broad access to these resources. This increased activity has been supported by an expanding set of offshore development opportunities worldwide. A re-rating of risk in the Middle East would likely build further momentum in this shift in capital flows. We see the greatest potential for an acceleration in deepwater opportunities in markets with extensive infrastructure, including the Gulf of America and the North Sea, and regions with previously discovered and well-identified resources that can add material volumes to an operator’s reserve base, such as West Africa. We also expect an increasing role for technology innovation in the delivery of both conventional and new energy supply. In that context, TechnipFMC is well positioned to translate our technological and operational strength into value for our clients.

The long-term outlook for oil and natural gas remains positive. Oil is projected to remain the largest primary energy source, with global demand for natural gas projected to significantly increase, largely due to growth in both electricity demand and industrial activity in developing countries. A significant portion of future gas needs will be sourced from offshore reservoirs, utilizing liquefied natural gas (“LNG”) infrastructure to enable transport from major gas producing regions—including the Middle East, Asia Pacific, and Africa—to a broader set of consuming economies. Renewables investment continues, although at a slower pace than previously forecast. Notably, the International Energy Agency revised its market outlook, projecting that oil demand could grow through 2050—a major shift from its previous view that demand would peak by 2030.

Within offshore, we are seeing more clients adopt a portfolio approach to development. Instead of focusing on the next project exclusively, operators are taking a broader portfolio view of their opportunities—executing a vision for their entire asset base. One example of this change is simultaneous development of greenfield assets, where an operator will carry out multiple projects in parallel rather than waiting for completion of the first project to incorporate learnings into subsequent phases. By executing as a single unit, operators benefit from integration and standardization that enable them to reach target production more quickly and economically than would be possible as standalone projects.

We also believe that offshore will play a meaningful role in the development of renewable energy resources and the reduction of carbon emissions. Our efforts are focused on greenhouse gas (“GHG”) removal, offshore floating renewables, and hydrogen solutions. We are also building on our partnerships as we look to expand our position as the leading architect for offshore energy.

In our New Energy business, we are executing multiple first-of-its-kind project awards, including the Mero 3 HISEP® project for Petrobras offshore Brazil. This project is enabling the capture, processing, and reinjection of CO 2-rich dense gases on the seabed to reduce emission intensity while increasing production. In the United Kingdom, we are executing the first all-electric, subsea integrated engineering, procurement, construction and installation (“iEPCI®”) for carbon capture and storage for the Northern Endurance Partnership, a joint venture between bp, Equinor, and TotalEnergies.

Subsea -Innovative approaches to subsea projects have improved project economics through more efficient design and installation of the entire subsea field architecture. Our integrated commercial model, iEPCI®, brought together the complementary work scopes of the subsea production system (“SPS”) with the subsea umbilicals, risers, and flowlines (“SURF”), and installation vessels. iEPCI®created a new market and helped grow the deepwater opportunity set for our clients. We also foresee the expanding reach of Subsea Services, derived from an aging installed base that continues to grow.

As the subsea industry continues to evolve, we are driving simplification, standardization, and industrialization to reduce cycle times and further reduce costs. An example of this is Subsea 2.0®, our pre-engineered configurable product offering. This technology simplifies projects by leveraging a Configure-to-Order (“CTO”) model to further accelerate time to first production while driving greater efficiencies for TechnipFMC.

With Subsea 2.0® and CTO, we have designed an architecture, process, tools, and culture that are scalable and transformational to the future of our company. Subsea 2.0® has allowed us to redefine our sourcing strategy and transform our manufacturing flow, resulting in up to 25 percent lower product cost and as much as a 12-month reduction in delivery time for subsea production equipment—savings that are both real and sustainable. This has paved the way for us to adopt a similar operating model for other products within our portfolio, enabling an enterprise-wide way of working.

Given these significant improvements, more offshore discoveries can be developed economically below current oil prices. We believe these fundamental changes are sustainable as a result of new business models and technology pioneered by our company—all of which serve as key enablers in our relentless pursuit of the reduction of project cycle time.

There is also momentum in new offshore frontiers as nations look to expand economic growth through the development of natural resources. We were awarded an iEPCI® contract for TotalEnergies’ GranMorgu project—the first subsea development in Suriname. In Namibia, there have been multiple discoveries, and operators have initiated appraisal drilling campaigns. We recently announced our participation in Mozambique for Eni’s Coral North project, and we believe that other opportunities in the region will soon follow. We remain confident that further exploration and appraisal activity will result in new projects in other new basins for some time.

As we look beyond the current year, we believe that offshore developments will continue to receive an increasing share of capital investment. The change in spending allocation is due in part to the significant improvements made in developing the large, high quality, and prolific reservoirs found offshore. Innovations such as Subsea 2.0® and iEPCI® also help provide customers with greater schedule certainty in project execution. We believe this combination of higher economic returns and greater project certainty will provide sustainability to current activity levels offshore, reinforcing our confidence that activity will remain strong through the end of the decade and beyond.

Surface Technologies– North American activity is among the most impacted by commodity prices given the relatively high cost of development in the region. Our surface activities on U.S. land represented less than five percent of total Company revenue in 2025.

International markets comprise a significant portion of segment revenue, representing 65 percent in 2025. These markets are less cyclical, as most activities are undertaken by national oil companies with long-term investment horizons and a lower cost of development. This is most evident in the Middle East, where we have made the investment needed to assist our customers in achieving their desired growth in production. TechnipFMC’s unique capabilities in these markets—which demand higher-specification equipment and local presence, including a services footprint—provides a differentiated growth opportunity for our company.