Petrobras (PBR), Ocyan Partner to Revitalize Gas Pipeline
Petrobras (PBR), Brazil's state-run oil company, recently awarded a contract to Ocyan, a Brazilian oil and gas services provider, to revitalize a network of gas pipelines in the offshore Campos Basin. The contract, valued at approximately $317.49 million, is expected to last four and a half years.
Scope of the Contract
The contract will involve revamping the pipelines of two decommissioned platforms — the Jorge Mitidieri and the Renato Duque. The pipelines are part of a larger network that transports natural gas from the Campos Basin to onshore processing facilities.
Campos Basin: Brazil's Oil and Gas Epicenter
The Campos Basin is an offshore oil and gas basin located off the coast of Brazil. One of the most prolific oil and gas basins in the world, it is responsible for a significant portion of Brazil's oil and gas production.
Petrobras is the operator of the majority of the oil and gas fields in the Campos Basin. The company has a long history of operating in the basin, and has developed a deep understanding of its geological and reservoir characteristics.
Revitalizing Operations
In recent years, Petrobras has been working to revitalize its operations in the Campos Basin. The company has launched a number of new projects to increase production from the basin and extend the life of its existing fields.
Ocyan will carry out the work through a 50/50 consortium with the Portuguese company, Mota Engil. The contract marks Ocyan's return to EPCI contracts for subsea construction.
Ensuring Brazil's Natural Gas Supply
The revitalization of the gas pipeline network is important for maintaining Brazil's natural gas supply. The Campos Basin is one of the country's most important oil and gas producing regions, and the pipelines play a key role in transporting natural gas to consumers.
Ocyan has been looking to expand its subsea construction business, and the contract provides it with a significant opportunity to do so.
Impact on Petrobras
Reliability in Gas Supply: The contract will help Petrobras maintain a reliable supply of natural gas to its customers. The revitalized pipelines will be able to transport additional gas, which will help meet the growing demand for natural gas in Brazil.
Cost Savings: The deal will also help Petrobras in reducing costs. The new pipelines will be more efficient than the old ones, which will help PBR save money on energy costs.
Zacks Rank and Other Key Picks
Currently, PBR sports a Zacks Rank #1 (Strong Buy).
Investors interested in the energy sector might look at some other top-ranked stocks like CVR Energy CVI and USA Compression Partners USAC, each sporting a Zacks Rank #1, and Harbour Energy HBRIY, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy is valued at $3.2 billion. In the past year, its shares have lost 9.9%.
CVI currently pays a dividend of $2 per share or 6.28% on an annual basis. Its payout ratio currently sits at 30% of earnings.
USA Compression Partners is valued at around $2.54 billion. USAC currently pays a dividend of $2.10 per unit, or 8.12% on an annual basis.
USAC provides natural gas compression services. The company offers compression services to oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil. It also operates stations.
Harbour Energy is worth approximately $2.4 billion. HBRIY currently pays a dividend of 21 cents per share, or 6.59% on an annual basis.
The company's activities include acquiring, exploring, developing, and producing oil and gas reserves. It has ownership stakes in several properties in the United Kingdom, Norway, Indonesia, Vietnam and Mexico.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report
CVR Energy Inc. (CVI) : Free Stock Analysis Report
USA Compression Partners, LP (USAC) : Free Stock Analysis Report
Harbour Energy PLC Sponsored ADR (HBRIY) : Free Stock Analysis Report
