Oil major, ExxonMobil Corporation (XOM) recently contracted Seawolf Oil Services Ltd. – a Nigerian offshore drilling company – for the supply of a rig. The contract is valued at 22 billion naira ($140 million).
Per the deal, Seawolf will supply one of its three rigs, 'JU Oritsetimeyin’ to ExxonMobil. The two-year contract will commence from the third quarter of 2013.
Oritsetimeyin is a 300ft independent cantilever jack-up rig and is expected to meet ExxonMobil's safety, environment and operational requirements. The rig was built in 2009 and drilled six oil wells for Total Exploration and Production Nigeria Limited.
The deal reflects Exxon's commitment toward supporting indigenous businesses, which have the necessary infrastructure and operational strength to overcome the challenges posed by the offshore oil business. The company's strategy also lends support to the Nigerian government's initiative of increasing indigenous players in the market, which has traditionally been dominated by international oil and gas majors.
Irving, Texas-based ExxonMobil Corporation is the world’s largest publicly traded oil company, engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other energy-related businesses. The company divides its operations into three segments: Upstream, Downstream, and Chemicals.
The company boasts diversified operations across the world with several new projects expected to come on line through 2013. While Exxon functions in all corners of the globe, the main areas of focus for the coming years include the U.S., Canada, Kazakhstan, West Africa, Australia, Russia, Angola and Iraq for new volumes.
Recently, ExxonMobil entered into an agreement to expand in the Bakken region with Denbury Resources Inc. (DNR) to acquire all of the latter’s Bakken shale assets.
ExxonMobil carries a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation on the stock.
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