Schlumberger Limited’s (SLB - Free Report) subsidiary Framo Engineering entered into a $200 million contract with Total E&P Angola, wholly-owned subsidiary of Total SA (TOT - Free Report) .
Per the deal, Framo Engineering will deliver subsea multiphase pumping system for the Girassol Resources Initiatives (GirRI) Project. The pump system will be installed in Block 17, offshore Angola at a water depth of 4,429 feet. It will augment the rates for two production flow loops.
The agreement also includes two subsea pump modules and a full system of topside power and control. The multiphase pump system incorporates the latest helico-axial technology. It can record differential pressure of up to 120 bar.
This is Schlumberger’s third contract with Total E&P Angola for its Block 17 asset.
Assembling and testing of the system will be done at Framo Engineering’s advanced test facility at Horsoy, Norway. It is expected that the pump system will be delivered in summer of 2014.
Earlier in August, Framo Engineering won a $100 million contract from A/S Norske Shell — subsidiary of Royal Dutch Shell plc (RDS.A - Free Report) for supply of booster pump system for its Draugen Field in Norway.
Houston, Texas-based Schlumberger Limited is a leading oilfield services company, providing technology, project management and information services to the global oil and gas industry.
We believe Schlumberger will benefit in the next several quarters from its strong product and services portfolio. We also believe the company is favorably positioned to benefit from current trends in oilfield services, given improving activity levels and greater need for stimulation and completion of services in North America.
However, seasonal and adverse weather conditions, such as hurricanes in the Gulf of Mexico and extreme winter conditions in the U.S., Canada, Russia, and the North Sea, may adversely affect demand for the company’s services and operations.
Hence, we maintain our long term Neutral recommendation on the stock.