Oil drilling equipment maker
FMC Technologies, Inc.
) has entered into a deal with Norwegian oil and gas firm
) for the supply of additional subsea equipment. The contract is
worth around $33 million in revenue.
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Per the deal, FMC Technologies will supply 10 production risers
and tieback connectors for the Snorre field located in the
Norwegian North Sea. For more than 20 years now, the company has
been supplying equipments for the development of Statoil's Snorre
field. The subsea equipment will be delivered in 2015.
FMC Technologies is particularly well positioned in the subsea
systems market and has received numerous attractive subsea
contracts in the recent past. Earlier, in October, the company
inked a deal with Total E&P Angola, a subsidiary of French
oil and gas major
), for the supply of additional subsea equipment for the Pazflor
Incorporated in 2000, Houston, Texas-based FMC Technologies is a
leading manufacturer and supplier of technology solutions for the
energy industry. The company, which operates 27 manufacturing
facilities in about 16 countries, is engaged in designing,
producing and servicing technologically sophisticated systems and
products such as subsea production and processing systems,
surface wellhead production systems, high pressure fluid control
equipment, measurement solutions, and marine loading systems for
the oil and gas industry. The company conducts its operations in
three segments namely Subsea Technologies, Surface Technologies
and Energy Infrastructure.
FMC Technologies shares currently retain a Zacks #3 Rank, which
translates into a short-term Hold rating. We are also maintaining
our long-term Neutral recommendation on the stock.
Subsea products have seen an increase in interest and we expect
earnings in this segment to strengthen - especially due to FMC
Technologies' leadership position in subsea production systems,
including subsea trees, controls, manifold and tie-in systems. On
the flip side, as is the case with other oil services and
equipment suppliers, FMC Technologies' results completely depends
on the movement in oil and gas prices, which are inherently
volatile and subject to complex market forces. A potential drop
in prices could curtail deepwater drilling and subsea equipment
demand, thereby affecting the company's revenues, earnings and