Oil drilling equipment maker
FMC Technologies Inc.
) has entered into a deal with Brazil's state-run energy giant
Petroleo Brasileiro S.A., or
) for the supply of subsea equipment. The estimated value of the
contract is $130 million.
FMC TECH INC (FTI): Free Stock Analysis
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Per the deal, FMC Technologies will supply three manifolds,
tools, spare parts and system integration with subsea controls
for Petrobras' pre-salt fields, located offshore Brazil. The
manifolds will be installed in water depth of about 8,200 feet
and the equipment will be manufactured in Brazil.
Development engineering and system integration testing of the
equipment will take place at FMC Technologies' technology center
in Rio de Janeiro. The company expects to deliver the equipment
from the beginning of 2015.
FMC Technologies also signed a renewed Framework Agreement with
). The contract is for 5 years and can be extended for 3 more
years. This deal comes on the back of a previously announced
agreement by Statoil.
In this contract, FMC Technologies will provide subsea operation
services for the development on the Norwegian Continental Shelf
and will keep providing installation services, asset management,
equipment intervention and well access services.
FMC Technologies currently retains a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next 1 to 3 months.
FMC Technologies' strong backlog, which now stands at more than
$5 billion, not only reflects steady demand from its customers
but also offers long-term earnings and cash flow visibility. This
enables the company to navigate uncertainty better than many of
However, FMC Technologies relies on its ability to develop and
acquire essential products and technologies that drive its
operational performance and growth. If its technologies or
products become obsolete, or if it cannot bring these to market
in a timely and competitive manner, it may face severe
operational and financial difficulties.
Meanwhile, oilfield equipment maker
Natural Gas Services Group Inc.
) with a Zacks Rank #2 (Buy), is expected to perform well in the
coming 1 to 3 months.