Baker Hughes, a GE company intends to bid for a production sharing contract likely to be tendered by Petroleo Brasileiro S.A. (PBR Quick QuotePBR - Free Report) or Petrobras SA, per Reuters. Notably, this is the first time that Petrobras will be inviting bids for production sharing accord from oilfield services players.

Petrobras is presently preparing to allocate significant capital to exploit and develop the prospective pre-salt fields of Brazil. Since the debt-laden integrated energy player’s capital budget is constrained, Petrobras believes that partnering with a leading oilfield services player would be a better option to generate handsome returns while producing from aging or matured fields.

With other leading oilfield services players, Baker Hughes is planning to compete for the production sharing deal with a focus not only to maximize oil and natural gas volumes from the aging Canto do Amaro field in the Potiguar basin but also to offer chunk of the produced volumes to Petrobras. It is to be noted that production from the Potiguar basin’s oil field started way back in 1986.

While Baker Hughes — based in Houston, TX — currently carries Zacks Rank #3 (Hold), Petrobras — headquartered in Rio de Janeiro, Brazil — sports a Zacks Rank #1 (Strong Buy).

Investors could consider two prospective stocks in the energy space like Shell Midstream Partners LP and Oasis Midstream Partners LP . Both the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Shell Midstream Partners has an average positive earnings surprise of 7.9% for the last four quarters.

Oasis Midstream will likely see earnings growth of 323.3% and 60.1% in 2018 and 2019, respectively. 

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