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Schlumberger (SLB) Signs MOU With Milaha for Qatar Work

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Oilfield services major Schlumberger Limited (SLB - Free Report) , recently entered into a memorandum of understanding (MoU) with Middle East maritime and logistics company, Milaha regarding oil well stimulation vessels for work in Qatar. Schlumberger has been serving Qatar’s oil and gas sector for more than 70 years providing key services such as seismic acquisition and processing, well testing and directional drilling, artificial lifts, well completions and groundwater extraction.

The MoU will support value-based approach to manage projects while working for ‘Tawteen’ initiatives for Qatar to create local content and acquisition of skills. The Qatar Petroleum-led program is designed to foster localization policy in the energy sector while retaining ‘economic value’ in the country.

Schlumberger in partnership with Milaha’s Offshore and Marine arm has agreed to a five-year joint development project which includes Qatar-owned, flagged and operated Oil Well Stimulation Vessel. The renovating and fitting of these vessels will be done to create the inaugural FLEXSTIM platform, which will be handled locally. The installation has already begun and is expected to complete during the fourth quarter of 2020.

Schlumberger’s offshore modular stimulation system, FLEXSTIM, has been installed on the vessels operating in the Arabian Gulf, Caspian Sea, Mediterranean Sea, Indian Ocean, South China Sea and South Atlantic Ocean. Per Schlumberger, the system can be designed and put to work within four weeks from the ordered date. Its capacity can be modified depending on specific needs.

Price Performance

Schlumberger’s shares have underperformed the oil and gas field services industry in the past six months. Shares of the company have improved 12.1% compared with 37.2% rise of the industry it belongs to.

Zacks Rank & Key Picks

Currently, Schlumberger has a Zacks Rank #3 (Hold). Some better-ranked  players in the energy space areHolly Energy Partners LP and Laredo Petroleum Inc , both sporting Zacks Rank #1 (Strong Buy) and  Keane Group, Inc which carries a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, the Zacks Consensus Estimate for 2020 earnings for Holly Energy Partners LP has been raised by 42.4%, while the same for Laredo Petroleum has moved up by 200.5%. Keane Group, Inc is expected to see earnings growth of 27.5% in 2021.

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