Welcome, everyone, and with me on the call today are John Evans, our CEO; and Ricardo Rosa, our CFO. The results press release is available for download on our website along with the presentation slides that we'll be referring to on today's call. May I remind you that this call includes forward-looking statements that reflect our current views and are subject to risks, uncertainties and assumptions; similar wording is included in our press release. I'll now turn the call over to John.

Thank you, Katherine, and good afternoon everyone. I will start with highlights from the third quarter before passing over to Ricardo to cover the financial results. Turning to Slide 4. After a subdued first half, our activity levels improved in the third quarter driven mainly by renewable. Revenues were up approximately 26% from the levels we reported in the first and second quarter at $947 million, while the EBITDA margin remained at around 12%. Once again, we report the strong cash flow generation and cash increased by $58 million to $542 million putting us in a net cash position. We have achieved some important strategic milestones during the quarter. We announced an extension to our PLSV contract in Brazil as well as the conversion of the same Phoenix to cable lay and Xodus 1 its first green hydrogen study in Australia. Turn to Slide 5 and our operational highlights. In the third quarter, we were active in Norway and the UK on Snorre, Ærfugl and Arran projects. Whilst in the Gulf of Mexico, we continue to work on the Mad Dog II project and started engineering on Anchor, King’s Quay and Jack St Malo. In Africa, Seven Borealis is currently active on the Zinia projects. The Life of Field business unit achieved high vessel utilization in the third quarter with work on its three long-term contracts in Azerbaijan, U.K. and Norway as well as activity in the Gulf of Mexico. The renewables business completed work on Triton Knoll with a Seaway Strashnov inside our contractual window, but the three other renewables vessels spent part of their time on client-paid standby in Taiwan with limited profit recognition due to a lack of progress. The Seagreen project made good progress. During the quarter, we accelerated the rollout of our digital initiatives across our businesses. And this included the use of augmented reality technology to enhance our remote access to project sites for clients. Turning to Slide 6, as always in this business, large new orders can be lumpy. Last quarter, we booked $2 billion of new work and this quarter was quieter, but our backlog remained resilient. SURF and Conventional announced two new awards, an extension to the PLSV contracts in Brazil and the project in Trinidad and Tobago. Renewables announced a win in Taiwan, but this is subject to FID and will be booked once the client has sanctioned the project. Overall within a backlog of $6.8 billion, our workload for execution and the remainder of 2020 is around $1.2 billion, whilst our backlog of work for 2021 rose slightly in the quarter to $3.6 billion. And now, I'll pass over to Ricardo to run through the financial results in more detail.

Thank you, John, and good afternoon everyone. Slide 7 shows our income statement highlights. Third quarter revenue was $947 million broadly in line with the same period last year and approximately 26% higher than the first two quarters of 2020, reflecting higher levels of activity in Norway and the Gulf of Mexico in SURF and Conventional in addition to an increasing contribution from our renewables business. Adjusted EBITDA of $114 million, down 37% year-on-year, was adversely impacted by reduced activity in SURF and Conventional as well as logistical and operational costs associated with COVID-19 of approximately $20 million net of recoveries. When compared with the second quarter, adjusted EBITDA was up 20% mainly due to higher renewables activity. Adjusted EBITDA margin was 12%, 7 percentage points lower than the margin achieved in the third quarter of 2019, but broadly in line with the second quarter adjusted for $104 million in restructuring charges. The net loss was $43 million equivalent to a diluted loss per share of $0.14. Turning to Slide 8 for additional details of the income statement, administrative expenses improved by $26 million against the prior year, driven by reduced tendering activity and travel costs as well as progress on the implementation of our cost reduction plan. Depreciation and amortization decreased by $15 million compared to the same period last year, reflecting the exit of Seven Pelican and Seven Mar from the fleet earlier this year. The tax charge of $32 million this quarter reflects the fact that we were unable to recognize tax credits on losses incurred in certain jurisdictions as well as the impact of irrecoverable withholding taxes. Moving on to Slide 9 to discuss our progress on the cost reduction program, which is targeting annualized cash savings of $400 million. Plans of fleet and headcount reduction remain unchanged. We envisage a net reduction in our fleet of up to 10 vessels and our workforce is targeted to be reduced by 3,000 people. Since we announced the cost reductions, we have extended the Seven Waves contract in Brazil and decided to reactivate Seven Phoenix converting it to cable lay and renewables. These changes have been incorporated into our plan and don't affect the eventual outcome. However, rephasing of certain activities from 2020 into 2021 by some clients has extended this timing of the savings realization to the end of 2021. We have made minor changes to the phasing of our capital expenditure plans. CapEx for 2020 is now expected to fall in the range of $210 million to $230 million, $20 million lower than the guidance given last quarter. In both 2021 and 2022, we are projecting capital expenditure to be approximately $130 million in line with our previous guidance. In addition to sustaining expenditures many on vessels, our capital spend will target investments in digitalization and technology, the conversion of Seven Phoenix and selective enhancements including environmental to the fleet and shore-based facilities, no new vessel construction is planned. On Slide 10, we summarize the performance of our operating business units. The SURF and Conventional business unit generated $613 million of revenue in the third quarter, 26% lower year-on-year, mainly due to lower activity in the UK, Africa and the Middle East. In the UK, diving activity was significantly lower than the third quarter last year. In Africa, as noted in earlier quarters this year, there was an absence of conventional work in Nigeria while in the Middle East activity has been minimal since the advent of COVID-19 and the timing of certain projects remains under review, including Marjan 2. Conversely activity remains strong in Brazil where the PLSV has achieved high utilization and in both Norway and the Gulf of Mexico, which recorded high levels of engineering and fabrication activity. Life of Field revenue on the quarter was broadly in line with last year as $65 million. Renewables and Heavy Lifting revenue was $269 million, a fivefold increase compared to the prior year, mainly driven by the ramp up in activity related to the Seagreen project. Net operating income for SURF and Conventional was $3 million compared to $62 million in the prior year as a result of low levels of activity and costs associated with COVID-19. Life of Field reported net operating income of $11 million in the quarter compared to $6 million last year, largely attributable to high vessel utilization on firm and spot work in addition to continuous activity on the three long-term contracts. Our renewables business unit finished the quarter at breakeven levels. Progress on the Seagreen project exceeded 5% of completion during the quarter, thereby allowing us in line with our accounting policies to recognize profit margin. This was offset by delays to project in Taiwan, which meant that three of our four renewables vessels were only earning standby rates. Slide 11 shows our cash flow waterfall chart. During the quarter, net cash generated from operating activities was $122 million, including a favorable movement in working capital, partly due to milestone payments on Seagreen and reduced activity levels in the Middle East. Our capital expenditure in the quarter was $20 million, compared to $33 million in the prior quarter, we incurred $29 million in lease payments mainly related to chartered vessels. At the end of the quarter, we had $542 million in cash and cash equivalents, an increase of $59 million from the second quarter of 2020. Our net cash position improved to $53 million, including lease liabilities of $273 million equating to a $326 million when lease liabilities are excluded. Our capital allocation strategy remains unchanged and is focused on three objectives: protecting the balance sheet, reinvesting in the business and returning excess cash to shareholders. We maintain a strong liquidity position with a revolving credit facility of $656 million and the Euro Commercial Paper program equivalent to current exchange rates to approximately $800 million, both of which are unutilized. In addition to a cash and cash equivalent position of $542 million. Our balance sheet strength provides us with the financial stability to preserve the competitiveness of our oil and gas businesses, while affording us the flexibility to capture growth opportunities in the renewables market. An example, being the conversion of Seven Phoenix cable layer. As we've already discussed, we continue to invest in the business in a disciplined manner, including selective investments in renewables, in digitalization and technology. The third objective is returning cash to shareholders. Subsea 7 has returned nearly $2 billion of excess cash to shareholders over the past 10 years. And we remain to returning surplus cash when conditions permit. To conclude Slide 13 shows our guidance for the full year. Last quarter, we provided 2020 guidance for the first time this year in light of improved visibility, despite remaining uncertainties relating to the impact of a new wave of COVID-19 and phasing of existing projects and prospects. Our expectations for the remainder of the year, are largely unchanged, revenue is expected to be in line with 2019 levels. We expect adjusted EBITDA to be broadly in line with current market expectations, excluding restructuring charges of $99 million, but including COVID-related net costs of approximately $65 million through September. Our administrative expenses are expected to range between $230 million and $240 million. Net finance cost is expected to be between $15 million and $20 million, while depreciation and amortization expense is expected to range between $440 million and $460 million. Our tax charge for the year is anticipated to be in the range of $10 million to $30 million. Finally, for 2020, as I've already mentioned, we have updated our expectations for capital expenditure, which is now expected to range between $210 million and $230 million. Turning to 2021. While the impact of a second wave of the COVID-19 pandemic remains difficult to evaluate, we expect revenue to be above the levels achieved in 2020, partly due to re-phasing of some SURF work from 2020, as well as continued growth in Renewables. We expect EBITDA to improve year-on-year and forecast net operating income to be positive.

I will now pass you back to John. Thank you, Ricardo. You will be familiar with our strategy summarized here on Slide 14. Today, I'd like to focus on two milestones: one, related to the Subsea field of the future and one on renewables, but both relating to our vessel capabilities. After three years of construction, the third quarter saw the completion of the Seven Vega, our new state-of-the-art, rigid-reeled, pipe-lay vessel. She has now finished sea trials and is currently picking up the BP Manuel EHTF pipeline from Vigra in Norway and will be on her way to the Gulf of Mexico. She offers our clients greater efficiency with field trips, to complete each project, as well as being equipped to lay both rigid and flexible pipelines, leading to higher levels of utilization. Seven Vega, already has a good backlog of projects starting with a series of campaigns in the Gulf of Mexico. Now moving to Slide 16. As you in September at our Renewables Investor Day, we announced the $25 million conversion of the Seven Phoenix to an inner-array cable lay vessel for the renewables business. That process is now underway in Poland and she's due to join the fleet towards the middle of next year. Phoenix will execute our strong backlog of cable lay work in 2021 and 2022, including inner-array cables on the Seagreen project. On Slide 17, we have a view of the outlook for tendering in the coming 12 months. Whilst the bidding pipeline for oil and gas projects remains relatively quiet, we have pockets of opportunity. Within this low oil price break evens and world-class discoveries, Brazil remains a bright spot. We continue to work on the feed for Bacalhau and we expect conversion to a full EPCI in the first half of 2021, subject to sanction by the client. We have commenced bidding for the Mero-3 SURF package and expect to see the Búzios-6 SURF package bid in the first part of next year. Norway is another highlight where we are seeing an increase in interest following the changes to the tax regime. And finally prospects in the Gulf of Mexico remain good, driven by low-cost tiebacks that leverage existing infrastructure. In renewables, we're seeing good levels of activity across the globe. And our teams are busy on a long list of tenders in each of the three main regions, Europe, Asia, and the U.S. Including for existing clients, such as Ostead and Equinor, and potentially new clients like Shell and EDPR. To summarize, we turn to Slide 18. We finished the third quarter in a strong position with a resilient backlog of $6.8 billion, including $3.6 billion for execution in 2021 and net cash on the balance sheet. From the solid foundation, we are well-placed to safeguard our markedly leading position in oil and gas through the cycle. Our cost reduction plan will help protect our margins and we retain the flexibility to respond to any improvements in conditions. In Renewables, our financial strength has given us the flexibility to make a disciplined investment to accelerate the growth in the offshore wind industry. Our 10-year track record of managing large, complex projects and a strong backlog gives us the platform from which to continue to build this business and to reinforce our proactive participation in the energy transition. And now Ricardo and I will be happy to take your questions. Thank you.

Thank you. [Operator Instructions] And your first question comes from Mark Wilson from Jefferies. Please go ahead.

Hi, good morning. I'd like to ask about the Seagreen green project from here versus the Beatrice project before. What are your learnings from that previous, large EPCI into this one? And does the profile of profit recognition from here, will it be similar to be addressed? And could you explain that profile, how that will come out over the next few years? Thank you.

Thank you, Mark. So yes, the project has started off well, we are fabricating in all three of our fabrication yards, the two in China and the one in the middle East. So progress is well under way. As Ricardo said, we passed the 5% completion this quarter. So going as planned. We did a lot of work with a client in the run-up to the award to make sure that we were fully aligned on the awards into the industry and the sub-contract partners that we selected. So we hit the ground running and that's going well. There is a slight complexity in comparing Beatrice with Seagreen on profit recognition because we started Beatrice part owning SHL and we completed Beatrice fully owning that business for us. So it isn't quite a straight read across from one and the other. But as Ricardo said, we will be following our standard POC-based profit recognition on the project. So it's exceeded 5% and will continue as cost on cost is achieved quarter-by-quarter. So for us we expect to see more fabrication and more procurement pushing through into 2021. And then we’ll be starting to offshore the first campaign late 2021. And there’ll be a further offshore campaign in 2022. So pretty comfortable that we’re following what we learned obviously the same client. So the tools had learned things together, and the teams are very aligned and we have a good approach on our project. So at the moment, we should see it moving as planned.

Okay. Thank you very much.

And your next question comes from [indiscernible] from Carnegie. Please go ahead.

Hi there, good morning. Let’s just curious on your backlog for Q4 looks quite high. So should you expect margins to so a trend towards reflecting opening leverage? Could you give some flavor on that?

Yes. Frederick, I think one thing to think about is coming back to the last answer here, we have quite a bit of a Beatrice, sorry Seagreen going through, so lower margin renewable work going through there, as we really kick into the main fabrication elements that we’ve got there for Q4. So for us, it’s about, we will see a larger revenue contribution. The other one to think about is we’ll have both the Oceans and the Vega working in quarter four as well. So we do expect to see an uptick in some of the workload that we’ll be seeing going through this. Our mixture of more renewables at lower margin and the Vega cutting in on the pipeline side.

Super. And looking into next year, obviously your guidance has served the same very much as expected, fairly vague, but your backlog now $3.6 billion is a very solid coverage on consensus for 2021. Do you have any sort of visibility on potential awards for the next six months that could really impact next year’s revenue or to the another way, but it makes sense to use the conventional ratio of the normal backlog coverage coming into next year and then make an assumption on the orders.

I think Frederick, it’ll be important to consider the fact that we are seeing the oil and gas sector in particular, having a long pause in terms of where it’s going to. In my prepared remarks, I gave you the geographies that we think there are opportunities. We’re also seeing other geographies where things are pretty much slowing down such as the UK, Africa, Middle East, and some parts of Asia. So I don’t think we can do the standard read across of where we would normally be at this point and just say, well, there’s another pile of revenue to come. The other thing, I think it’s very important and I think we’ve telegraph this to the market quite regularly, that there are some key contracts that do need to be awarded to us such as Bacalhau sanctioning, Scarborough sanctioning into next year that are important for us for future years. So I think at the moment, we don’t expect to see a very big surge in unrewarded work next year. I think one of the things to remember this quarter un-awarded work has some distortions in it. Our PLSV extensions has come through escalations this quarter. So again, I think I’d be cautious about just reading that straight across into future quarters.

Great. Thank you.

And your next question comes from Michael Alsford from Citigroup. Please go ahead.

Thanks. Good afternoon. I’ve got a couple of questions if I could please. Just looking at this year’s underlying EBITDA margins, if you strip out the restructuring costs of $99 million and COVID-related costs of $65 million, it feels like the EBITDA or underlying margin is around what 13.5% year-to-date. I’m just wondering whether that’s a good reference point as we head into 2021 on the backlog to be executed next year. And then secondly, if you could maybe talk a little bit about the renewables bidding pipeline. If there was a way you can perhaps differentiate in the market is around your integrated approach. So I was just wondering whether you could give a sense as to on the projects that you’re tendering for in renewables, you how much as a percentage is really an integrated type scope with array and – array cables and foundations. And perhaps how much is, I guess, also lump sum some turnkey contract type work. That’d be great. Thanks.

Yes. Thank you. I think what’s interesting for us at the moment on renewables is that Taiwan, which is one of the growing markets where there is opportunity today is going more traditional segmented route. So that will be more standard T&I. As we saw with projects like [indiscernible] there is interest in Europe towards combining transport and install cables with transport and install foundations. But I think the market that is showing quite a bit of interest is the U.S. market, a lot of big players have moved into the U.S. market. And we are bidding as you see on the slide where we show our outlook for what we are bidding a number of projects in the U.S. What’s interesting on those projects, they are bid as standard segmented projects, but some of the discussions with the clients are, so can you explain to us what are the advantages of combining, for example, transport install cables with transport and install foundations. And also some of the clients are also looking at the U.S. market as to a view now with, they can see probably four or five years of projects coming together. So they might be looking to package some of those together. So I think its fluid. I think it’s the answer to the question. But I think what is interesting is the dialogues with the clients are about, okay, we bid them out in these modes. What would be the advantage of doing that? We’ll see how they finally award those packages. And also as well, I think the change in the political landscape in the U.S. may also be of interest in terms of the speed at which those U.S. projects might speed up as well. So for us, I think the U.S. will be the area in the renewables will offer us opportunity. Could I just ask you – can you just give us the 2021 question again? Sorry, because I didn’t quite catch that first time, right.

Yes, no, of course. So it was really looking at the underlying margins that you’re generating EBITDA margin for the business. If you take out, I guess COVID-related costs and the restructuring costs, the business needs to be doing about a 13.5% EBITDA margin. And I’m just wondering whether that’s sort of a good level to think about as we head into next year. Appreciate there’s a mix shift towards renewables, but equally you’re going to see cost savings coming through from the cost saving program. So I just wonder if you could maybe elaborate a little bit more on the evolution of margin. Thanks.

That’s fine. I’ll ask Ricardo to answer that. Thank you.

Yes, Mike. I mean as you know, we never comment specifically about ranges of margin percentages on EBITDA. However I would reiterate the comments that we’ve included in our outlook with respect to 2021. I mean, you’re correct in assuming that our guidance is measured against our projected actual results of 2020. We’re excluding the restructuring costs. But we are including forecast COVID-19 net costs for 2021. And clearly that’s a key variable. We’re assuming that there’ll be lower next year, but we don’t know given the fact that we are having the world is facing a second wave. We do expect to see the continuing impact of the cost reduction measures that we started this year. However, I must emphasize that our cost reduction efforts are designed to protect margins in the current difficult environment. It’s – we’re not assuming that there’s going to be a margin widening as a result of those efforts. We’ve mentioned the fact that renewables will be a key element of our activity next year. And the –we will also see a reduced contribution from PLSVs as a result of the extensions that we’ve achieved. We still believe that that’s an excellent outcome given the market as it is. And we will be executing projects where we expect to execute projects that have been awarded in what we’re relatively difficult circumstances still in the market. So those are the variables that I think you need to evaluate in assessing the possibility of a widening EBITDA percentage.

Great. Thanks very much. Great color. I’ll hop back.

And your next question comes from Amy Wong from UBS. Please go ahead.

Hi, thanks for taking my question. I had a question on your tendering pipeline, which is how would you – I mean a lot of the projects that you’ve listed on Slide 17, that’s very, very helpful. We’ve seen those projects on there for a while. Could you talk a little bit about how kind of the current mobility restrictions, how your conversations are evolving with your customers, like it’s a more difficult to get new project on the list. And how has that kind of almost like a pre-tendering pipeline looking. That’s my first question, please.

Thank you, Amy. I guess like all these things, COVID has made the relationship slightly more complex, but it hasn’t meant that we haven’t carried on. I think what we have on Slide 17 is the result really of the oil price crash and the rethinking that our clients have done on the oil and gas side. What we are seeing as we mentioned in the prepaid results is the fact that they’re all very much certain areas where, for example, Norway tax breaks have meant the clients are engaging with us, wanting to look at their projects, wanting to accelerate, to make sure that they can sanction those projects in good time, to make sure they are a part of the tax break system. So Norway has a dynamic which is positive and which is strong. I think markets like UK are quiet, we’re seeing a lot of transactions where operators are buying and selling assets with each other, but not really focusing on putting new infrastructure into place. I think the Gulf of Mexico, as I mentioned, we have seen good dialogue with clients, because they have existing infrastructure, they have existing export routes to market there through existing hub systems there, so again good dialogue there. Brazil, we know that Petrobras made a very ambitious bit for the Buzios transfer of rights fields and we’ve seen Petrobras carry on with their discussions. They brief to the market that they’d be looking to bring Buzios 6, 7, and 8 in quite close timescale for bidding. So six is first part of next year, we would also expect to see seven next year and probably eight next year as well. So those dialogues continue to be positive. And clients are quite open with us about what they’re trying to do. Bacalhau, we’ve mentioned that, that we expect that to tune into a full contract in the first half of next year. Moving over to Australia, Australia is really a story of LNG and continuing to feed LNG plants. So Jansz-Io was the next phase of Gorgon, where they’re putting a compression system in the Gorgon to improve the pressure in the field. That’s I forbid at the moment. Woodside Scarborough, again, very public, so Woodside this week, again making very positive statements about which way they’re going. Middle East is quieter as our clients are trying to decide where their cash flow is going and how they want to spend. Ricardo touched on the Marjan 2 has been looked at by Saudi Aramco at the moment as is the current profile. Although Qatar is very positive and we see two big projects such as NFPS, which are large pipeline projects and NFE, which again is a large pipeline projects out to the market. So if we go round, we can see a number of activities moving last year on Africa, Pecan and Rovuma, as you know, we will pay the contract and continue to be favored contractors on those projects. They are more longer term discussions with the clients as to when they’d be looking to sanction those projects probably towards the back end of next year or early part of 2022 was a sale of GC is a near-term opportunity that we would expect to come to the market in the first part of next year. So a mixture of some names, Amy, that you’re quite familiar with and some new projects that are going on there as well. And I think it’s more about this is where our clients are choosing to spend their time and money and these are the projects that they’re interested in the near-term.

Sure. That’s really helpful color. Thanks, John, for that. My second question is, it’s a bit related. It’s also around your customer base. In your prepared remarks, you talked about in your renewables business that you could potentially get to some new clients like Shell and EDPR. Shell, for example, you’re obviously has already one of your customers in your oil and gas business. So could you give us some kind of talk about, how it works, when you’re working with Shell on the renewable side, are the practices similar that front, any synergies talking to the procurement side from that business?

Yes, I think what’s interesting, we’re seeing our major oil and gas clients such as Total, Shell, BP, Equinor. Although, as we all know Equinor have been in renewables for a decade. So they’re in a slightly different place in this. Looking at how they’re doing it. We had a meeting last week with one of those three where they explain how they’re going to work in the future. I guess, what’s very interesting a lot of those companies are using their project development organizations that we are very familiar with an oil and gas, it’s representatives from those areas that will be running these projects. They’re also – we’ve done some sessions privately with the senior leaderships in those companies about how integrated projects work, how EPIC projects work, how T&I projects work in renewables. So I think we’re at that stage, Amy, where they’ve made the commitment to move in and they all learning and trying to position themselves. They’re quite comfortable with FCs and some of the areas that we are very interested in talking to our clients on. So at the moment is a transition going on, but there’s a linkage between people that we know from the project development sides of each of those companies moving into that space. And I think each client is working different ways of moving in. You saw, for example, BP link up with Equinor and Empire Wind in the U.S. But again, the operator on that job is Equinor. And we have our linkages with Equinor there. So I think it’s an interesting time the speed, which the major operators are committing very definite money on renewables is a positive for us. And I think those linkages will be very useful for us in the years to come.

Very clear. Thank you very much.

Your next question comes from Vlad Sergievskii from Bank of America. Please go ahead.

Yes. Hello, gentlemen. Thanks very much for taking time. Just a couple of quick clarification from me. John, on the backlog for execution next year, so it’s 3.6 billion. Is there a portion of this $3.6 billion, which is still subject to clients, potentially changing fading on the project or it’s largely set by now. And would you be able to disclose what proportion roughly over the $3.6 billion is related during year goes. That’s the first one. And secondly, very quickly on the evaluation of lease payments, what do we expect to happen to them next year, you and your efforts to optimize the plate? Thank you very much.

Thank you, Vlad, as ever a number of questions in one there. So on the phasing that I think it’s fair to say that the discussions on phasing is still not quite over yet with our clients. I think it’s fair to say the Middle East countries clamp them very, very hard post-COVID and the timings at which the projects will actually take place is a bit fluid at the moment, certainly in the Middle East. So I wouldn’t say that the $3.6 billion is all clear and all are finalized. Although, the conversations we are having with our clients are constructive and everybody’s aligned to trying to manage how that happens. As Ricardo says, the second wave of COVID and which parts of the world that impacts and where that comes in. Yes, we understand the rules as we understood them last time, whether or not they’ll be the same, some countries change them. So we have to manage that. So effectively, we think we have a reasonable understanding of how our work is coming together, but clients are certainly very much as we’ve said all the way along in COVID looking at rephrasing to manage their cash flows and manage some practical issues further up and down the chain as well rather than looking at retendering or canceling work and moving it. So the rephrasing getting there, but I wouldn’t say it’s over. In terms of lease payments, maybe Ricardo, you could take the lease payments question.

Certainly, John, and good afternoon, Vlad. I mean, clearly, you’re asking us about, we can’t provide detail on individual lease payments and lease commitments, because they are commercially sensitive. But I think it’s fair to say that the bulk of our lease liabilities that’s on the balance sheet related to our vessels that we have charted. And you can identify those vessels on Page 23 of our investor pack. Fundamentally, they are – the majority – the vast majority of those vessels are assigned to life of field work. What I can say is that the contracts are relatively short-term. So we have some flexibility there, in terms of what we can achieve in cost reduction, depending on our capacity needs. And it's the safest – I think it's a safe assumption to assume that we will be reducing our commitments in the coming years.

That's great. John and Ricardo, thank you. Very quickly to just clarify, will you be able to provide some detail on what proportion of next year backlog for execution is related to wind?

We don't normally break that out, but I think you can look at where we were at the end of the last quarter with $7 billion with about 30% of it on renewables as not being a bad proxy for roughly what I might be looking like in the next year or so.

Thanks very much.

And your next question comes from Sasikanth Chilukuru from Morgan Stanley. Please go ahead.

This is Sasikanth Chilukuru from Morgan Stanley. Thanks for taking my questions. I had two please. The first was going back to the costs related to COVID and the 20 million that you have taken in this quarter. I was just trying to understand if you could provide some clarity on what these underlying costs were especially in this quarter, just wanted to see or understand the recurrence of these costs in coming quarters? In that context, does your current guidance for 2020 EBITDA does it incorporate any further impact in 4Q and also given the current conditions, what are the chances of these costs spilling into 2021 as well? The second question I had was regarding your comment of returning excess cash to shareholders. You're talking about conditions being – if they were favorable that you would come back to this policy, just understanding what other – what are those conditions do you think, what are the conditions that you would think would trigger returning excess cash to shareholders? Is it more to do with the net debt on the leverage side? If you can any comment on that would be useful as well. Thank you.

Thank you. I'll try to answer the COVID question first and I'll pass over then to Ricardo to talk about how we think about returning excess cash to shareholders. The important thing to remember about COVID is every single country or every single state in the every single country has their own set of rules and that costs us money. And we've been very open from day one that there's a cost to keeping working in a COVID safe way. Generally our offshore teams work five or six week rotations. And in many countries today, we have to quarantine them for two weeks before they go off shore, they then have to have two tests in that period, and then they have to go offshore. So that's one chunk of money that we see that exists. Places like Taiwan and Rico, you need to do two weeks quarantine when you come back before you leave the country. So that takes a five week shift up to a nine week shift, you might extend the shift a bit longer, but that again is another slug of money that we spend. We're also finding, moving people backwards and forwards around the world with the drastic reduction in airline and number of flights. So what used to be a two-day trip from Brazil via Amsterdam back to somewhere in Europe is now a three or four day trip via a number of lands around the world. We also had a situation during this quarter, for example where one of our ships in the U.S. had to go and stand in port for two weeks, because we had one positive case on the vessel. Because again, the U.S. port authorities said that the vessel doesn't leave until two weeks, clean test results. So I guess the answer to the question is, it varies by every country that we work in. We had very much hoped that we would be seeing the end of this by the time we go to quarter four, although now we're starting to see a resurgence, there were changes in rules in Norway in the last week, in terms of what is now expected and what quarantine levels are required for mariners coming in and out of Norway. So I think to answer your question, we are like everybody here we manage it as best we can. We have the same information as everybody else has on this topic, but there is a cost to it. And we have to recognize that there is a cost to it, and we believe it's a cost to the business. That's the reason we deduct it from our EBITDA. We know our main competitors don't. So I would hope that when you compare us to our competitors, at least you put us on a like-for-like footing. So, will it spill over into 2021, I don't know. I really don't know. Although we're seeing at the moment that there is a reemphasis on working from home in many parts of Europe and very much a self-protection mechanism in many countries. If you look at the UK at the moment, we have completely different rules in Scotland than we have in England at the moment as well in our operations. So it's not just countries, it's actually states and sort of elements of that to manage. I'll hand over to Ricardo to talk about how we look at excess cash.

Okay. Thank you, John. And if I could just make one last more comment on COVID. I do want to emphasize that these are net costs. So to the extent the clients specifically reimburses the cost, so even governments, an example being furlough, we will take that into account in determining the net impact on our profitability of the virus. On the question of returning excess cash to shareholders. As I indicated in my prepared remarks, we have a good track record of returning cash to shareholders. However, we have never committed to a regular dividend. We believe that the inherent volatility of our business requires us to take a flexible approach. We are definitely investor-friendly, shareholder-friendly nevertheless, I do want to emphasize that. And we together with the board will evaluate whether or not, there is excess cash to be returned to shareholders in the light of the macro environment and the trends we're seeing there. So the prospects for the two business – the two main businesses that we're in, which is obviously SURF and conventional, and renewables. We will evaluate the needs for reinvesting in the business for future growth, either in the form of capital expenditure or M&A. And also the importance of maintaining what an investment grade profile, which we see as a competitive advantage in this sector. So only after evaluating all those elements, will we consider the amount that can be returned to shareholders. And this is a process that takes place on a regular basis and at least every year.

Sure. Thank you very much.

Okay.

Your next question comes from Kevin Roger from Kepler Cheuvreux. Please go ahead.

Yes. Good afternoon. Thanks for picking. Only one last question and maybe it's a tricky one, sorry for that. But if I just focus on your SURF activity, commercial pipeline and would you say that for next year, it is likely that your order intake will be better, especially as we add with some positive news on some contracts like Bacalhau in Brazil, and so we have some major opportunities like these one, your order intake itself would be better in 2021 than 2020?

Kevin. I think it's a good question. As I mentioned earlier, there are number of projects, were also Bacalhau, Scarborough where we are the selected contractors subject to FID. And the FID is on those rather large contracts are in a process where our clients have been transparent with the markets about how are they going to make their decisions. So we would expect that we would start to see, that in next year, we would see some of those larger projects kicking into place. We will be with some of the smaller projects, not so clear, because we did quite well in the first quarter before COVID really hit us in terms of that. But I think it's fair to say directionally, we would be expecting to see some of the bigger projects starting to cut in and hopefully a year from now, we would have a better visibility or rumor on Pecan, and also as well, we would expect that Mero-3 and Buzios 6 would have been awarded to the market by then. So I think directionally that's not a bad way of looking at it.

Okay. Thanks a lot for that.

And your next question comes from David Farrell from Credit Suisse. Please go ahead.

Hi, I got in. Thank you very much for taking my questions. Two fade, I just wanted to ask on the Seven Vega, good to see that that's finally being taken on by Subsea 7. I just wondering is there anything left to do in terms of commissioning prior to that vessel, starting work, that might kind of risk the execution of the projects. And then my second question was on the three vessels you have in Taiwan. How long do they have – can they stay there? And at what point they go otherwise that they obviously need to get on with in 2021, which will be outside of Taiwan or another project in Taiwan.

So, the Seven Vega has passed its commissioning. We have accepted the ship and she's now in our fleet and under our control and operation. As ever with a big building out there's some minor punch list items, but we are comfortable. The punch list items can be managed in parallel. So she is loading product on [indiscernible]. So she is – she's in work with us. And we went through quite a rigorous process of commissioning the vessel. So we would hope that she will go into work. And as I mentioned in my prepared remarks, she has a long list of projects to execute. On Taiwan, it's about access to site and authorities are permission given for access to site. That is something that I'd prefer our clients would deal with that. So I don't intend to give you any more answer on that topic. It's a matter that our client is working on, and I don't think it's a right that I give any more information a lot at this stage.

Just a follow up Ricardo, you can say in terms of kind of direction of working capital either in fourth quarter as we head into 2021, obviously being a tailwind this year. But is there anything from Seagreen that's still left to come through that might continue that tailwind into next year?

David, we don't usually give detailed guidance on working capital at this stage. However, what I would say is that, we have, in addition to some very good efforts to improve our working capital position, we have benefited from advanced – from the milestone payments that we have had from Seagreen in particular exist us in the procurement phase of the project. I expect that that will be remain in a positive cash position. I expect some of that to unwind [indiscernible] furthermore activity picks up again in Saudi Arabia in particular, the payment policy of Saudi Aramco is such that you would expect to see an increasing investment in working capital in the coming months as well. So on balance, I am not expecting to see the positive impact of working capital that we've had this year repeated next year, but we will manage it tightly.

Okay, that's very clear. Thank you.

And your next question comes from Nick Konstantakis from Exane. Please go ahead.

Hi, guys, and thank you for taking my question. [indiscernible] presentation, you spoke of the 2025 revenues of about a $1 billion contributing the acceleration of the installation market and the work there post that 25 to 30, if we can look that far out where we're sitting today. Is there any reason why your revenue within grow, if not in line without these, there is a way within growth and that’s even without necessarily investing into new vessel which you've clearly said you don't want to do. And then secondly, just a very quick one for Ricardo, of the costs you have been incurred so far due to COVID, is there any discussions or any potential to get part of that reimbursed within the fourth quarter into next year?

So I think your question on renewables, I'll answer first, then Ricardo can answer the COVID question. We see the market growing and we share that during our Investor Day. For us, it's a great opportunity, that we can see it is a little bit lumpy. It's sort of – sort of it's up and down from where we are now to 2024. But then after that, then we can see a very clear path that it will grow. We are very clear in our thinking that as these projects get larger, more geographically diverse, the clients will be looking more towards Etsy and that's an area that we feel comfortable to offer. We can run multiple Etsy projects in oil and gas in parallel. And so we can see that as being an opportunity for us in renewables. As we mentioned on the Investor Day, renewables has a larger propensity towards subcontracting among the main players for different packages, because there's more uniformity for example, 5,000 ton lift cranes in the foundation market. We all have similar capabilities, whereas in the SURF business, there's a lot of very tailored assets that do certain things. So for us, we do believe that the opportunity post 2025 is very good for us. So there is a good steady growth from here to 2025, but then there's a major step up in the whole market. And we'll be keeping a very careful eye on what opportunities that market gives us as well. So I think to answer your question, we have the ability to run multiple projects, large projects in oil and gas, and therefore we can do the same in renewable. So when that opportunity starts to materialize 24, 25, 26, I think we're well-placed to capture that. You asked a question about how to view COVID costs. I'll ask Ricardo to finish that one off as well. Thank you.

Thank you, John. The question of COVID cost recovery is a very difficult one to model. What I would say is that some clients are more open to recognizing that there are additional friction costs that we incur in executing the projects, others take a much less sympathetic stance. We work with them. We engage with them regularly and constantly, and reminding them of the costs that we're incurring. And clearly there are a number of commercial discussions around our contractual relationships with them in that context. So, I think that it is fair to say that in some cases we are successful in convincing clients to give us a reimbursement. It's certainly not a general case, and there's always a time lag between the costs incurred and the recoveries. So as a result, it's a very difficult number to model on a quarter-to-quarter basis. I think you can assume that to the extent that COVID continues to affect our businesses, that we will incur a net cost in every quarter. But again, I do want to emphasize that we work hard to recover where we can, the costs that we have incurred.

Understood. Thank you.

And your next question comes from James Thompson from JPMorgan. Please go ahead.

Great, thank you very much. Gentlemen thanks for taking my questions. I just wanted to follow up on COVID just reading or listening to what you said just now, Ricardo, should we assume then embedded in your 2021 guidance is a similar sort of run rate for COVID costs? Or is it something like…

James, that level of granularity is not something that we're prepared to disclose. We have made an assumption that COVID will not disappear completely in 2021. We believe that's too optimistic. But we are assuming that the impact will be reduced as compared to 2020. Time will tell whether we're too optimistic on that front.

Okay. Okay. That's clear. And then separately, and just thinking about obviously you had quite high escalation this quarter and John, you've spoken lot about rephrasing particularly in the Middle East. Is this then an opportunity for sort of scope changes to remain at relatively high levels as we go forward? I mean, in terms of these contracts, are you saying the extra time, an opportunity to optimize. Are you sort of able to benefit at all from potentially low input costs as well as incurring higher COVID costs? So there's some positive dynamics here that might mean the escalations particularly in the Middle East remain relatively high?

I think that the escalations quarter as I mentioned earlier is a mixture of different things. So you've got the PLSV's in there, which is a no number, which is a large chunk of it. We also have elements associated with some adjustments, which our clients have given us on some North Sea contracts. But I think the Middle East is more about shifting the time. It's not about the money; it's about the timing of which the projects get executed. But one of the challenges we've got is again, when we stretch the times though that increases our costs because we have overheads and other elements in there that we have to do. That the challenge we see today is the COVID environment in the Middle East is – it's very black and white; getting people in the country, we can't get people in the country. And, so for us, it's around, how does all that settle down? And when do we execute our projects? The other thing I think it's important to remember and we've discussed this before we have a partner, which fabricates all the materials in India. So what happens in India with COVID and the access to those sites, and then the access to which we can get the platforms, and the top sides installed is also material to Subsea 7's success in the Middle East. So I think the COVID picture in Middle East and India is complex for us. And it's more of a risk in my mind than an opportunity. So it's more to do with how the timing of those projects moves around and how it all fits together.

Okay. Thanks. Just one final one for me. This year I'd imagine that a lot of smaller projects were canceled during the peak of COVID, 2Q, 3Q, probably particularly in North Sea, and those clients probably still want to do that work next year. Are you saying quite a lot of activity, the smaller end, the sort of the level you will not – you don't normally close. I mean, you've given us good color on the larger contracts, but do you see a good pipeline of the smaller Q3 rework coming in the middle of 2020 – 2021, sorry.

As I mentioned before, Norway is more about projects that will get sanctioned in 2022 for off-shore in 2023 and 2024. So nothing in the immediate term with a tax break there because the tax break is around sanctioning projects that go ahead. Gulf of Mexico, yes, opportunities in the near term. Clients are moving quite quickly there. As I mentioned, the UK market is a lot of sort of financial engineering going on with different people selling assets to each other, that doesn't sort of really lead and to a sort of very fast investment decision there. So it's a mixed picture. I guess the answer to your question. Fundamentally today, it's the fields that work below $40 a barrel that come to the top in which we have a geography you look at. So I think that's the first cut. If these projects don't work at $40 a barrel, they don't make it into the hopper in the first place. And then secondly, then sort of geopolitical environment in those countries, drives it. So for us historically we picked up a lot of, uh, smaller step outs in the UK, not so sure we're going to see many of them coming in the next couple of years. Norway, we feel comfortable that Norway will give us good opportunity, but no necessary in 2021.

Okay. Very fare. Thanks so much gentlemen.

And the final question comes from Peter Testa from One Investments. Please go ahead.

Hi, and thank you for taking the questions. I'll go one at a time. If you look at the timing of the savings related to project execution, timing moving more towards the end of 2021. Is that embedded in the comments on the backlog size, and that some of that might move or if some of those move – would that also further impact the savings and maybe where you could say specifically where does margin to fit within those, those comments?

I think the answer to your question is, as I said earlier. Things are getting clearer to us in terms of timing of projects, but there's still some fluidity in that. Certainly the discussions on the Middle East work are not are the place where we can conclude where we're going to be finally on that one of the stages.

Okay. I guess the question was; if the – if the, say backlog or margin to or Middle East contracts move, does that also mean the savings move since they're related to project – protecting margin and project?

If it impacts the assets, we had 10 assets that we were going to do a release. If it affects any of those and yes it will; but for us that is a different linkage point for us. If you know what I mean, we've sized the organization around the business we see ahead of us in the next few years. We saw the asset based around that. So for us, it's only if those assets are extended, for example, as we discussed one of the PLSV's. We now have four PLSV's working whereas we have thought in our mind, we only have three. So that's the effect that those decisions have on our cost reduction plan, right.

All right. Okay. And then on the project delay of execution in Taiwan for the renewable side, which impacted Q3, are you expecting that to be performing at all now in 2020? Or is that more something which will come back into at some point in 2021?

As I mentioned to a previous question, that's a math that our client is working through at the moment, with regarding giving us access to site, and once we get access we'll do the work. So it's something between them and the authorities and different stakeholders in the country. And just remember here, Taiwan is a brand new market. There wasn't an offshore wind job there in two years ago. So, we go through the learning collectively as an industry of regulatory environments, stakeholder management. We went through all of that in the UK 10 years ago with offshore wind farms with protests, from the bird authorities and such like. So it's a growing pain of the new industry. So, I think we've just got to recognize that as Taiwan has exploded in terms of opportunity, but there'll be bumps along the road. And we're in a situation where we're in a good dialogue with our clients about how we can help that situation.

Right. And I wasn't clear from an earlier question as to when you expect your next project in Taiwan to be started. When is it scheduled to start?

Well at the moment we have one project that's underway and we do to start one project in the next few weeks again, subject to us being able to go to work.

Yes. Okay. And then last question is just on the oil and gas side. If you look going forward in the 2021 with the backlog of execution at 2021; if you could give any comments on margin mix changes, and as you think about new projects, larger projects and environment, whether the few of them. Do you see any particular change in how you work with clients to try to give a comfort on margin transparency as you also don't want to be back on a COVID situation where you – it's unclear as to how those costs are taken. Do you get any sort of different relationships that come –that may also impact them? How margins work?

Well, I think I'll answer your previous question, whatever I'm going to say about the view of how we see next year fitting together and the moving parts of that. I think one thing that's clear or any new work that will come in and there will be clarity as to who takes COVID costs. And I think that's becoming clear to the industry. And so those discussions are being had with our clients around the globe. So at least the clarity as to who takes what is clear when we started this, the music stopped, and nobody at the start of this year knew what COVID was. So I think, the clarity will be there, Peter in terms of where we see the responsibility lying. But as Ricardo says, the level of sympathy between different clients as to whether they feel they need to be sharing that cost. The only thing we need is clarity as to who takes the cost, because if we have to take the cost, we'll add it in. so that's the way we look at it.

Okay. Now, thanks for taking my questions.

Thank you.

And with that, thank you very much, everybody for joining us for our third quarter call. It's an interesting time in the world. We hope we've answered your questions. I'm sure we'll be talking to a number of you offline. And we look forward to you joining our fourth quarter call in 2021. Thank you.