U.S. super major
ExxonMobil Corporation
(
XOM
) recently contracted Norwegian oilfield services firm Aker
Solutions for the supply of subsea umbilicals for the Erha North
phase two development in Nigeria. However, the companies did not
reveal financial details of the deal.
Per the agreement, Aker will deliver two dynamic and two steel
tube umbilicals of a total length of 16.5 kilometers
(approximately 10 miles). The umbilicals − scheduled for delivery
next year − will be designed, engineered and manufactured at
Aker's facility in Mobile, Alabama.
Erha North phase two, located approximately 97 kilometers
offshore Nigeria in water depths ranging between 1,000 meters
(3,300 feet) and 1,200 meters (3,950 feet), marks an extension of
the existing Erha subsea system and infrastructure.
ExxonMobil operates the Erha developments through its subsidiary,
Esso Exploration and Production Nigeria Limited. It holds a
56.25% participating interest in the OML 133 production sharing
contract region. On the other hand, a Nigerian affiliate of
Royal Dutch Shell plc
(
RDS.A
), Shell Nigeria Exploration and Production Co., holds the
remaining 43.75%.
Erha North is one of the many oil and gas ventures, which have
been delayed for years. This was due to the inability of the
Nigerian National Petroleum Corporation and the International Oil
Companies to enter into a contract on their costs estimated at
more than $30 billion.
Although we remain skeptical due to ExxonMobil's continued
disappointing production trend, we expect major capital projects
and upstream ventures to drive 2013 production volume.
Additionally, the start-ups of Kearl and Kashagan and the
production ramp-up from 2012 start-ups in Angola and Nigeria are
also added incentives. The company boasts diversified operations
across the world with several new projects coming online through
2013.
ExxonMobil retains a Zacks Rank #3, which is equivalent to a
short-term Hold rating. Meanwhile, there are certain other
companies in the oil and gas sector that are expected to perform
well and are worth buying now. These include
Total SA
(
TOT
) and
Statoil ASA
(
STO
) with a Zacks Rank #2 (Buy).
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis
Report
STATOIL ASA-ADR (STO): Free Stock Analysis
Report
TOTAL FINA SA (TOT): Free Stock Analysis
Report
EXXON MOBIL CRP (XOM): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research