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Oceaneering, US Navy Cut A Deal for Submarine Rescue Systems

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Oceaneering International, Inc. (OII - Free Report) , a leading supplier of offshore equipment and technology solutions to the energy industry, recently announced that its Aerospace and Defense Technologies (ADTech) section has secured a deal with Naval Sea Systems Command (NAVSEA) for managing and maintaining the U.S. Navy's submarine rescue systems.

The contract has a validity of one year with four one-year extension options. Its potential value is estimated to be $119 million. Oceaneering has been serving the U.S. Navy Submarine Rescue program for more than 20 years with process improvements and capability reinforcement. The company will team-up with California based Undersea Rescue Command for maintaining, certifying and operational purposes for the submarine rescue systems and related equipments. The contract bolsters Oceaneering's expertise in providing operations and maintenance support.

The senior vice president of ADTech segment, Philip Beierl, stated that their participation in submarine rescue, submarine maintenance, and offshore subsea operations will ensure that the U.S. Navy has a secure and accessible submarine rescue capability. Oceaneering's highest commitments are to provide proper safety and quality measures contributing to the international submarine rescue community.

For oil service companies like Oceaneering, the contract comes at a time when the slump in oil prices and corona virus-induced demand shock has resulted into lesser work. The oilfield service fundamentals remain extremely bearish with most of the companies entirely focused on survival. From biggies Halliburton (HAL - Free Report) and Schlumberger (SLB - Free Report) to Core Laboratories (CLB - Free Report) to Oceaneering, the company boards have adopted various strategies to survive the downturn. They have been lowering capital spending, furloughing employees and cutting executive pays. In this context, Oceaneering’s contract win is certainly welcome news for the investors.

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