Petrobras ( PBR Quick Quote PBR - Free Report) awarded a ‘very large’ contract to the seabed-to-surface contractor, Subsea 7 ( SUBCY Quick Quote SUBCY - Free Report) , to deliver subsea equipment for the development of the Mero-3 oilfield offshore Brazil. For Subsea 7, a very large contract ranges between $500 million and $750 million.
Discovered in 2010, the Mero field is a giant deep-water oil field development in the pre-salt Santos Basin. Notably, Petrobras made the investment decision to develop the third phase of the Mero project in August 2020. The Mero-3 field is situated nearly 200 kilometers along the coast of Rio de Janeiro, about 7,217 feet below the water surface.
The Mero field is part of the Libra block, which is currently being developed by a consortium of energy companies. Notably, Petrobras is the operator, with a 40% ownership interest in the block. The remaining partners include
TOTAL SE , Royal Dutch Shell Plc ( RDS.A Quick Quote RDS.A - Free Report) , each having a 20% interest in the field, while CNOOC Limited and China National Petroleum Corporation own the rest.
The scope of the contract involves engineering, fabrication, installation and pre-commissioning of 80 kilometers of rigid risers and flowlines for the steel lazy wave production system, 60 kilometers of flexible service lines, and 50 kilometers of umbilicals and related infrastructure. Moreover, it includes the installation and hook-up of the FPSO mooring lines.
The work management and engineering of the third phase of the Mero project will begin at the offshore service provider Subsea 7’s offices in Rio de Janeiro and Paris without any delay. Notably, pipeline construction will be conducted at the Ubu spoolbase facility of Subsea 7 in Vitória, while offshore operations are expected to be implemented in 2023 and 2024 with the help of Subsea 7’s most capable reel-lay vessels.
In March 2021, Subsea 7 announced the acquisition of a major contract for the Mero project, whose contract scope was said to include engineering, project management and procurement. However, Subsea 7 did not reveal any details of the deal.
The contract relies on Petrobras’ strong and collaborative relationship with Subsea 7 to produce and process the extracted oil from wells in the oilfields.
Company Profile & Price Performance
Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. Its activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks. Further, it comprises refining, processing, trading and transportation of oil and oil products, natural gas, and other fluid hydrocarbons beside other energy-related operations.
Shares of the company have outperformed the
industry in the past three months. Its stock has gained 20.2% compared with the industry’s 8.6% growth.
Petrobras currently sports a Zack Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here . +1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
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