ABB Ltd. (ABB) bagged an approximately $20 million order to provide subsea power cables for Statoil’s Gudrun North Sea oil and gas field, located off the coast of Norway. The contract was awarded by the deepwater services arm of Ezra Holdings Limited, called EMAS AMC.
The project involves building a transmission system, which would transfer 20 megawatts (MW) of electrical power from Statoil’s Sleipner fields to the Gudrun field. This will be done by 55 kilometers of 52 kilovolts (kV) three-core submarine cable with integrated optical fiber to be supplied by ABB. Cable from ABB has an option for additional connections as per the requirement.
The installation work will be initiated by the EMAS AMC in the third quarter of 2013, which will help to begin oil and gas production at Gudrun by 2014.
The emerging markets are a major benefactor for ABB. Rising demand levels in mature market also supports ABB’s future growth prospects. Price increases initiated by the company to meet the rising raw material costs will lead to margin improvement. ABB focuses on attaining profitable growth opportunities by maintaining a competitive cost position, strong balance sheet, strong presence in global market and a leading technology.
ABB Ltd.’s power and automation technologies offer a solution for sustainable development, thus helping to shield the world’s resources. The company has a number of technologies for the solar power industry and also a growing installed base. ABB Ltd. has witnessed improving signs in late-cycle power, with some recent large contracts.
However, ABB’s results are likely to be adversely affected by macroeconomic weakness as more than 80% of the company’s orders are derived from outside the US. A major competitor of ABB Ltd. is Siemens AG (SI).
ABB Ltd. is a Zurich (Switzerland) based power and automation technology company. The company operates in approximately 100 countries, structuring its global organization into five regions: Europe, Americas, Asia, the Middle East and Africa.
We maintain a Zacks #2 Rank (short-term Buy recommendation) on ABB Ltd.