U.S. supermajor ExxonMobil Corporation (XOM - Free Report) has selected France’s Technip for its Balder Phase III development in the Norwegian North Sea.
Per the contract, Technip will be accountable for the installation, tie-in and pressure testing of flexible jumper bundles. Technip is also entitled to set up subsea distribution units and flying leads. The work will be undertaken in three offshore campaigns during 2013 and 2014 by Technip, which will also use one of its own vessels.
The contract is expected to be performed in Tehnip’s operating centre in Stavanger, Norway. Located around 190 kilometers off the coast of Stavanger, primarily in Block 25/11, the Balder field development lies in water depth of around 125 meters.
ExxonMobil, the operator and the sole license holder in the Balder field development has projected 170 million barrels recoverable oil reserves in the field. Currently, the field generates around 135,000 barrels a day.
ExxonMobil is the world’s best-run integrated oil company given its track record of superior return on capital employed. As the largest publicly traded oil company, ExxonMobil has long been a core holding for investors seeking a defensive name with continued dividend growth. Exxon’s strength is in its balanced operations, strong financial flexibility and continuous improvement in efficiency and cost control.
The company boasts diversified operations across the world with several new projects expected to come online through 2013. While Exxon functions in all corners of the globe, its near-term focus will be on the U.S., Canada, Kazakhstan, West Africa, Australia, Russia, Angola and Iraq for new volumes.
ExxonMobil, which recently proposed to offload its shale gas exploration licenses in Poland along with Talisman Energy Inc. , holds a Zacks #3 Rank, equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation.