Maker of oil drilling equipment, FMC Technologies Inc. (FTI), inked a subsea equipment deal with major integrated oil and gas company, Statoil ASA (STO). The estimated value of the contract is roughly $90.0 million.
Per the agreement, FMC Technologies will purvey subsea trees, wellheads, a manifold, control systems integration and other related tools for the development of North Sea’s Norwegian sector-based Gullfaks Rimfaksdalen project.
FMC Technologies reveals that the above deal represents an additional award, following last year’s agreement with Statoil relating to the development of Gullfaks oil and gas field. On Jul 5, 2012, FMC Technologies entered into a contract with Statoil to construct and supply subsea production tools for the development of the Gullfaks South oil and gas field. The deal’s value is estimated at $200.0 million. The equipment delivery has started in the second quarter of 2013.
Houston, Texas-based FMC Technologies is a leading manufacturer and supplier of technology solutions for the energy industry. The company conducts its operations in three segments: Subsea Technologies, Surface Technologies and Energy Infrastructure.
FMC Technologies is well-positioned in the subsea systems market. It is the company’s largest and fastest-growing business, accounting for about two-thirds of revenues. Moreover, FMC Technologies has received numerous attractive subsea contracts in the recent past from energy majors like Royal Dutch Shell plc (RDS.A) and Total SA (TOT).
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 and/or products become obsolete, or cannot be brought to the market in a timely and competitive manner, the company might face severe operational and financial dilemmas.
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.
More From Zacks.com