Oil drilling equipment maker FMC Technologies Inc. (FTI) has entered into a contract with BP plc (BP) to supply subsea systems for development of the latter’s Shah Deniz Stage 2 project. The deal would fetch about $322 million in revenues for FMC Technologies.
The order involves delivery of subsea manifolds, related controls and connection equipment, in addition to key controls and connection mechanism for subsea production trees. Before moving on to the manufacturing phase, FMC Technologies and BP will undergo three years of pre-engineering work to accelerate delivery.
The Shah Deniz gas field is situated 70 kilometers southeast of Baku, offshore Azerbaijan, in the Caspian Sea. It is the largest natural gas field in Azerbaijan, located at a depth of 600 meters. BP is the operator of the field with a 25.5% stake.
Houston, Texas-based FMC Technologies is a leading manufacturer and supplier of technology solutions for the energy industry. The company is engaged in the designing, producing and servicing of technologically sophisticated systems and products. These include 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.
Strong backlog position, growing international operations and a favorable outlook for subsea activity levels favor FMC Technologies’ growth. However, with markets remaining competitive and pricing likely to be weak, the company may not see much upside potential in the near term.
FMC Technologies currently carries 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.
Meanwhile, one can consider better-ranked players from the same industry like Matrix Service Company (MTRX) and Cameron International Corporation (CAM). While Matrix sports a Zacks Rank #1 (Strong Buy), Cameron holds a Zacks Rank #2 (Buy).
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