Another Statoil Contract for FMC - Analyst Blog

Houston, Texas-based FMC Technologies (FTI) has entered into a $54 million contract with Norway's oil major Statoil ASA (STO). Under the deal, FMC will manufacture and deliver two subsea production trees, one manifold and associated subsea and topside control systems to the latter. These equipments will be utilized for the development of Statoil's Gygrid offshore field in the Norwegian sector of the North Sea.

Located at a depth of approximately 820 feet, the oil and gas field was discovered in 2009. It is estimated to reserve about 30 million barrels of oil and will be developed as a two-well (one production, one injector) field. Statoil plans to tie Gygrid (35% operating interest) to the Njord semisubmersible production platform and start production in late 2012 or early 2013.

All equipments for the project will be based on a standard subsea solution drafted by FMC Technologies. Deliveries are slated for the third quarter of 2011.

FMC's long-standing relation with Statoil is supported by the four mutual deals signed since June, last year. Excluding the present deal, the other three projects were the Pan Pandora deal in June 2010, Katla oilfield development contract in September 2010 and the Vigdis North-East development agreement in December 2010.

FMC Technologies is a leading manufacturer and supplier of technology solutions for the energy industry. The company enjoys the benefits of a diversified product portfolio, specialty service capabilities and proprietary technological expertise.

However, the uncertain commodity price outlook along with a soft global economy compels us to maintain our long-term Neutral recommendation on the stock. FMC Technologies currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

 
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