Offshore oilfield equipment manufacturer FMC Technologies Inc. (FTI - Free Report) entered into a deal with Total E&P Angola, wholly-owned subsidiary of Total SA (TOT - Free Report) for supply of subsea equipment. Estimated value of the contract is $33 million.
Per the deal, FMC Technologies will supply three additional subsea well systems for the Pazflor field, located in block 17 offshore Angola. The original subsea system, which was delivered to Total for the same field, has been functional for over a year. The order is part of FMC Technologies’ strong and longstanding relationship with Total.
Earlier in 2011, FMC Technologies received an $80 million contract from Total. The deal included manufacture and supply of subsea production systems to Total-operated Girassol Resource Initiative (GirRI) project in Block 17 development, located offshore Angola in the Gulf of Guinea.
FMC Technologies is particularly well positioned in the subsea systems market and has received numerous attractive subsea contracts in the recent past. Earlier, in March, the company signed a four-year subsea equipment supply pact with Brazilian oil major Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) .
Texas-based FMC Technologies is engaged in designing, producing and servicing technologically sophisticated systems and products such as subsea production and processing systems, surface wellhead production systems, high pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry.
However, we maintain a long-term Neutral recommendation on the stock, given the uncertain commodity price outlook and a soft global economy that continue to weigh on the company. Additionally, competitive market conditions along with weak pricing also make us apprehensive.