FMC Tech, Petrobras in Subsea Deal - Analyst Blog

Oil drilling equipment maker FMC Technologies Inc. (FTI) has entered into a memorandum of understanding with Brazilian state-run energy giant Petroleo Brasileiro S.A. (PBR) , or Petrobras S.A., to build future subsea technology solutions for its oil and gas projects offshore Brazil.

FMC Technologies said that the agreement includes the development of innovative and cost effective subsea production systems to deal with the challenges related to Petrobras' pre-salt oil and gas reservoirs (oil deposits located in the sea bed under thick layers of salt).

Additionally, it includes the manufacture of subsea processing technologies that can enhance recovery rates at the Rio de Janeiro-based integrated major's maturing oil and gas fields. Both companies believe that the pact will lead to the development of a portfolio of subsea systems.  

FMC Technologies – whose presence in Brazil began in 1956 and currently consists of two manufacturing facilities in Rio de Janeiro and one service base in Macae – expects the latest agreement to further augment its strong presence in Brazil and play an important role in the development of systems that can effectively produce hydrocarbons in Brazil's deepwater and pre-salt environments. 

The company also has a longstanding relationship with Petrobras and has supported many of the latter's subsea processing achievements. The memorandum of understanding, together with FMC Technologies' Technology Center in Rio de Janeiro – announced in July of 2010 and likely to be completed in the first half of 2011 – will further strengthen these collaborative efforts.     

Houston, Texas-based FMC Technologies is a leading manufacturer and supplier of technology solutions for the energy industry. The company, which operates 25 manufacturing facilities in 15 countries, is engaged in the 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 retain a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.

 
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