BP Exploration Operating Company Limited, a unit of the
British energy giant
) has awarded a contract to oilfield services company,
Oceaneering International Inc.
). Per the deal, Oceaneering will supply umbilicals for BP's Quad
204 field development, west of Shetland, in the United Kingdom.
The contract is valued at $45 million.
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The umbilicals cables to be delivered are 11.8 miles (19
kilometers) in length. Oceaneering expects the final phase of
product manufacturing to be completed by the second quarter of
This deal will provide BP with 2 riser and 5 infield umbilicals
for electrical and hydraulic power. The umbilicals will also
offer chemical injection to subsea trees and production manifolds
located at the U.K. energy major's drill centers at Quad 204.
During the third quarter of 2012, BP and Oceaneering signed a
10-year term agreement − the Global Subsea Hardware Umbilical
Agreement − under which the latter is committed to supply
umbilicals as well as ancillary equipment and services to BP at
satisfying order specifications and terms. This latest contract
is part of this agreement.
The Quad 204 development project in the U.K. North Sea is part of
BP's endeavor to extend the life of Schiehallion and Loyal fields
through 2035. Situated on Blocks 204 and 205, Schiehallion field
is considered one of the largest and deepest developments in the
North Sea. BP operates the field with a 33.35% interest.
Associate partners in the project include
Royal Dutch Shell plc
) with a 49.01% stake, while
), Murphy Oil Corporation (MUR) and OMV each hold a 5.88% stake,
respectively. The development plan of Loyal is also underway.
BP remains busy in reshaping its portfolio through the divestment
of smaller non-core properties to pay spill-related costs, while
holding on to potential big resources. Hence, refocused upstream
activities and a leading position in the Gulf region, following
the Macondo incident, will definitely help BP in overcoming its
BP's volume shrunk approximately 7% year over year in the fourth
quarter of 2012, mainly due to field declines and divestments.
However, major project start-ups, an enhanced operation in Angola
and higher output in other areas partly offset the decline.
Hence, the company's aim to focus on four high-margin areas -
Angola, Azerbaijan, the Gulf of Mexico and the North Sea, will
definitely aid BP to grow its output there over the next five
BP currently holds a Zacks Rank #3, which is equivalent to a Hold
rating for a period of one to three months.