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TechnipFMC (FTI) Clinches Major EPCI Contract From Petrobras

TechnipFMC plc FTI recently secured a major contract from Petrobras PBR for engineering, procurement, construction and installation (EPCI) at the Mero 2 oil project.

Located 2,100 meters deep in the Santos Basin, off the coast of Brazil, the pre-salt Mero field is headed and operated by Petrobras through Libra Consortium. The Consrotium was formed by Petrobras, Shell Brasil TOTAL TOT, CNPC, CNOOC Limited CEO and Pré-sal Petróleo SA (PPSA).

Per the agreement, TechnipFMC will provide engineering, procurement, construction, installation and pre-commissioning of the infield rigid riser and flowlines for production including the water alternate gas wells. The deal also consists of the installation and pre-commissioning of service flexible lines and steel tube umbilicals along with towing and connecting of the FPSO.

The currently Zacks Rank #4 (Sell) company will draw synergies from the Mero 1 project Subsea EPCI, utilizing in-house rigid and flexible lay vessels as well as its significant local footprint in Brazil including a spoolbase, logistics base and engineering capabilities. The offshore campaign is slated to commence in 2022. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This EPCI contract by the Libra Consortium reinforces the close association of TechnipFMC with the Brazilian energy giant Petrobras and enhances its capability in the pre-salt region, thereby boosting its presence in Brazil.

Last month, TechnipFMCsecured a major contract from Assiut National Oil Processing Company (ANOPC) to build a new Hydrocracking Complex for the Assiut refinery in Egypt. This engineering, procurement and construction deal is valued at more than $1 billion.

Per the deal, lower-value petroleum products from Assiut Oil Refining Company’s adjacent facility are likely to be converted into 2.8 million tons per year of cleaner fuels, such as Euro 5 diesel. The company is working on fulfilling the remaining conditions required to initiate the project work.

Shares of this London-based operator have plunged 64% year to date compared with the 18.1% decline of its industry. The oil price has been persistently displaying a downward curve following the coronavirus pandemic’s adverse impact on global energy demand. The historic oil market crash and the coronavirus-induced low demand for the fuel resulted massive capex cuts by the upstream players, which in turn, created an extremely challenging operating environment for oilfield service players like TechnipFMC. Winning major contracts against the backdrop of the ongoing economic downturn is a boon for the company.

 

Brief on the Company

TechnipFMC is a leading manufacturer and supplier of products, services and fully-integrated technology solutions to the energy industry. The company, having descended from the January 2017 merger between Technip and FMC Technologies, is engaged in designing, producing and servicing technologically-sophisticated systems and products for subsea, onshore/offshore and surface projects.

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