Offshore oilfield equipment manufacturer,
FMC Technologies Inc.
) has entered into a deal with CNR International - a wholly owned
subsidiary of independent oil and gas explorer
Canadian Natural Resources Ltd.
) - for supply of subsea equipment.
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Per the deal, FMC Technologies will supply three manifolds, six
subsea trees, eight wellheads, associated topside control systems
and a Subsea Control System including subsea distribution systems
for the Baobab field, situated in Block CI-40, roughly 16 miles
offshore Ivory Coast, West Africa. The subsea equipment is slated
to be delivered in 2014. The field started its production by the
second half of 2005 and is currently producing 65,000 barrels of
oil and 15 million cubic feet of natural gas per day.
Earlier in January, FMC Technologies received a $114 million
contract from LLOG Exploration Company, LLC. Also, in December
last year, the company signed a $33 million subsea equipment
supply contract with Norwegian oil and gas company
Incorporated in 2000, Houston, Texas-based FMC Technologies, Inc.
is a leading manufacturer and supplier of technology solutions
for the energy industry. The company, which operates 27
manufacturing facilities in 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.
FMC Technologies shares 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 one to three months.
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 and manifold and tie-in systems.
Nevertheless, like other oil services and equipment suppliers,
results for FMC Technologies are directly exposed to 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 cash flow.