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GE Signs New Contract with Petrobas

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GE Oil & Gas, a unit of General Electric (GE - Free Report) recently won a contract from Petrobras Brazil for the world’s largest subsea wellhead production. This contract is valued at approximately $1.1 billion (R$2.2 billion) and will deliver approximately 380 subsea wellhead systems and the required installation tools in oil well exploration.  However, it is expected that more than three fourth (75%) of the wellheads will be produced in GE’s plant at Jandira, Sao Paulo, Brazil. GE has invested about $30 million in order to expand its production capacity.

Earlier in 2009, GE Oil & Gas and Petrobras had signed the biggest wellhead contract (in terms of number of wellheads) at that time, worth $250 million. Given the huge demand in Brail, GE Oil & Gas has been continuously investing in new capacities for new order wins. Apart from the one mentioned above, GE has two other facilities located in Niterói and Macaé, Rio de Janeiro, Brazil, involving a total investment of about $232 million. The plant at Niterói primarily targets the new sub-salt fields while the facility at Macaé is GE Oil & Gas's most modern subsea system services provider in the world.

The announcement of this contract was made by GE at the 2012 Rio Oil & Gas being held from September 17-20 in Rio de Janeiro.

Furthermore, the acquisitions of Wellstream and VectcoGray have made GE an established player in the offshore industry. With employee strength of 5000, GE Oil & Gas handles some of its industry’s biggest and complicated projects in more than 50 countries.

With a market cap of $234.8 billion, General Electric Company operates as a technology and financial services company worldwide. It currently has a Zacks Rank #3, which implies a short term ‘Hold’ rating on the stock.

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