) received a contract from Jurong Shipyard Pte Ltd. for the
design, supply, supervision of installation, testing and
commissioning of the main electrical systems for seven next
generation drill ships. The contract is valued at $160
The ships will operate in the deep water oil and gas fields
off the coast of Brazil. Bookings in this contract were made in
the fourth quarter of 2012 and first quarter of 2013.
As per the plan, wells will be drilled in the offshore
pre-salt fields off the southeast coast of Brazil with the help
of these drill ships. These high-efficiency drill ships are the
first of its type and will be using the integrated electrical
package of ABB to maximize energy efficiency.
Estaleiro Jurong Aracruz plans to build seven such vessels for
ultra-deep water operations at their shipyard on the central
eastern coast of Espirito Santo, Brazil. The shipyard is wholly
owned by Singapore-based Jurong Shipyard.
ABB will be providing electrical systems including generators,
distribution switchboards, transformers, drives and motors to
power the ships' thrusters and drilling systems for this project.
The solutions to be provided by ABB are as per IEC (International
Electrotechnical Commission) and IMO (International Maritime
The equipment will be delivered to the shipyard in 2013 and
the first vessel will be delivered in the second quarter of 2015.
Sete Brazil, a company established in 2010 by various Brazilian
and international investors, will receive the ships.
ABB's expertise and its ability to provide locally produced
content for this project along with the the skill of its local
organization give ABB the advantage to execute this contract
successfully. The company has worked on a number of such projects
with Jurong's shipyard in Singapore. In addition, the contact
also provides ABB a good opportunity to enter the high potential
Moving ahead, the emerging markets will be a significant
growth driver for ABB. Demand in mature markets is also expected
to improve. Customer capital expenditures have soared with the
rise in commodity prices.
Increased capacity in some later-cycle infrastructure-related
businesses continues to exist. In many sectors price
stability has been attained and ABB has escalated its prices to
counter rising raw material costs.
However, ABB Ltd's results are likely to be adversely impacted
by macroeconomic weakness as more than 80% of the company's
orders are derived from outside the US.
ABB Ltd. currently has a Zacks #3 Rank (Neutral). Its close
rivals such as
Tyco International Inc.
) both have Zacks Rank #2 (Buy).
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