And given the traction that the industry as a whole has, we think we will be able to do more with that. The U.S. Gulf of Mexico, yes, grew significantly last year. I said in my prepared remarks that, this year we expect that to be a bit more stable. But some of the other offshore basins, represent significant growth for us, Brazil, West Africa, Asia, North Sea, et cetera.
Saurabh Pant: Right, right. Okay. No. That’s very helpful, Girish. And then one maybe unrelated follow-up on the ISP or integrated services and products business. So obviously, I think, Arun, you talked about in your prepared remarks on the Oman and Saudi integrated contracts fully ramping up and doing really well, and I think you got maybe one in Mexico as well. How should we think about that business relative to your overall growth? Girish, I know you talked about maybe picking up one or at most two contracts like that a year. How should we think about that growing relative to the business overall? Does it grow faster than your overall business? And then just in terms of accounting, how you report some numbers, I got a few people asking me on the all other line, Arun, if you can give us a little color on what goes into that within ISP, and what goes into the main operating segments?
Arun Mitra: Sure. So Saurabh, the ISP business is — we report ISP in two categories, ones which are product line related, make its way into the segments, and the one which is predominantly purchase, resale and project management is the part that gets reported in all other. And that component is what kind of is dilutive to our overall margins, as Girish outlined. But having said all of that, it is also, from a CCC standpoint, accretive because of no CapEx and lower inventories. So in terms of growth, I would almost consider the same growth as you consider for the enterprise, or the ISP other segment. And it’s not big enough for us to report as a separate segment. So once it does, you will get transparency about that. But we don’t see it happening in ‘24 at least.
Girish Saligram: Yes and looks for the first part of your question, what I would say is. These ISP projects for us will be set, really when they happen. They will create an accelerant to growth. We have not really factored into our projections. Anything significant that would happen as a one-off that would give us an added pull up to the growth. So if that happens, obviously, we will we will come back, we will announce that and an outline that like we did in 2022, when we got these two – awards. So, but look. I think — our whole thesis has always been, make sure we win these like with everything else run it stabilize around it. And the team has done an outstanding job of execution, which gives us the confidence — to look to see what else we can do.
Saurabh Pant: No. That’s fantastic. Okay, Girish, don’t. Thanks for those answers. I will turn it back.
Girish Saligram: Thanks, Saurabh.
Operator: Thank you. And our next question comes from Kurt Hallead with Benchmark. Please go ahead.
Kurt Hallead: Hi. Good morning.
Girish Saligram: Hi, Kurt.
Arun Mitra: Good morning, Kurt.
Kurt Hallead: Thanks for all the color this morning. So Girish, first on your end, right? You referenced that there’s something like 100 large projects and a number of smaller projects that are expected to be up for FID over the course of the next three years that would then provide some visibility for revenue growth out through the end of the decade. So again, not looking for specifics here, but maybe in the context of that total addressable market, when you look at the different regions in which you report your operations, which regions do you think would offer the highest growth? And how would you kind of rank the regions in terms of, again, whatever risk adjustment you mentally want to put into the process of what may happen or what may not happen, I am just curious as to what regions do you think will offer the biggest growth opportunities for you through the end of the decade.
Girish Saligram: Yes, Kurt. Look, I think our overall thesis on this remains reasonably intact. I will start with look, head and shoulders, we think the Middle East continues to be the one that spearheads the growth, sort of the broader Middle East. And it’s really sort of secular. It’s countries like the Kingdom of Saudi Arabia, it’s UAE, Oman, Kuwait, et cetera, including North Africa, right? So you have got Egypt that continues to be a really interesting opportunity, several other projects, et cetera. The one maybe question mark on the Middle East is Iraq, just given some of the challenges there. But in the long term, we expect that to be positive as well. The second one is Latin America. And look, in Latin America, Brazil is sort of leading the way but Mexico is pretty strong as well, both PEMEX as well as all of the other operators that are — that have got activity in Mexico.
And then there is, I think, a little bit of a question mark as we see how Argentina fares over the course of the year, hopefully comes out to be a very big positive. And actually, over the next four to five years becomes a big boost to growth. And then look, the last piece of it, I would say, sub-Saharan Africa. There’s always a higher degree of risk to some of the projects there, but we see that both on the East and West Africa side to be a fairly positive signal. So look, multiple different areas but we have also got growth in Asia. We have got growth even in North America. So I really think for the next few years, we have got a positive outlook.
Kurt Hallead: I appreciate that. And I just wanted to circle back on the commentary about expect CapEx to average 5% of sales on a full year basis. And I think that dovetails with what you mentioned in terms of contract wins and satisfying those contracts. But in a certain extent, if there is anyone who might get a little bit nervous, it’s always when oil service companies start to increase CapEx. So I was just wondering if you could give you an opportunity here to kind of address that in the context that I am assuming you are not ramping CapEx in anticipation of things, you are ramping CapEx to address specific contract awards.
Girish Saligram: Yes. Kurt, I appreciate the question. We have been very clear about this. And we have spent a lot of time thinking through our 3% to 5% framework, doing a lot of analysis on it. And we have stuck to that now for a while. This is down significantly from what used to be the normal, 7% in an up cycle, 10% to sometimes 12%. So it’s already significantly curtailed. But the way we look at CapEx is we are not sort of following this philosophy of build it and they will come. It is very project-specific. It’s where we have got line of sight and a clear view on potential contingency plans on redeployment, et cetera. And as we have stated on these calls multiple times, look, we are actually reasonably comfortable if we miss out on some of the opportunities that we could have had if we had built more CapEx because we want to make sure we have got the right capital model, the right capital intensity on a through-cycle basis because we are in a cyclical industry.
So we are very, very careful about that. And I think you see that reflected in our return on invested capital metric that Arun referenced.
Kurt Hallead: Appreciate that. Thank you.
Girish Saligram: Thanks Kurt.
Operator: Thank you. And ladies and gentlemen, this concludes our question-and-answer session. I’d like to turn the conference back over to the management team for any closing remarks.
Girish Saligram: Great. Thanks, Rocco. Thank you all for joining today, and we look forward to joining you again in about a few weeks’ time to give you an update on the Q1 results. Thank you, and have a great day.
Arun Mitra: Thank you.
Operator: Thank you, everyone. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day.
