Houston, Texas-based FMC Technologies (FTI) announced that it has signed a $125 million supply contract with Brazilian oil giant Petroleo Brasileiro S.A. (PBR) or Petrobras S.A. Per the terms of the deal, the former will supply 32 subsea trees for the development and expansion of Petrobras’ oil and gas fields in offshore Brazil. The delivery is slated for 2013.
This order forms a part of the four-year subsea tree frame agreement inked by the two companies in February 2010. The scope of the deal involves the manufacture and delivery of up to 107 subsea trees and equipments for use in water depths of 6,500 feet.
FMC Technologies shares a long-standing relationship with Petrobras and has supported many of its projects by supplying over 300 subsea trees. Management of FMC Technologies seeks to fortify ties between the two companies by being a part of Petrobras’ offshore endeavors in the coming years.
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, enjoys benefits of a diversified product portfolio, specialty service capabilities and proprietary technological expertise. We believe that FMC’s strong backlog position and growing international footprint will help it to capitalize on high subsea activity levels.
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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