Oil drilling equipment maker FMC Technologies Inc. (FTI) entered into a deal with Jakarta, Indonesia-based PT Rajawali Swiber Cakrawala for the supply of subsea equipment. Estimated value of the contract is $40 million.
Per the deal, FMC Technologies will supply topside and subsea distribution control system for the South Belut field development. The field is at a water depth of 102 meters and is located in the South Natuna Sea Block B PSC. This contract builds on FMC Technologies’ earlier deal with ConocoPhillips (COP) signed in February 2011.
The equipment will be supplied from FMC Technologies’ facilities in Norway and Malaysia. Delivery of the subsea equipment is slated for second quarter 2013.
FMC Technologies also received a subsea equipment order from Statoil ASA (STO) earlier this month for $152 million. Per this deal, FMC Technologies will supply five subsea trees, five wellheads, two manifolds, control systems and other connected equipment.
FMC Technologies shares currently retain a Zacks #5 Rank, which translates into a short-term Strong Sell rating.
Incorporated in 2000, Houston, Texas-based FMC Technologies, Inc. is a leading manufacturer and supplier of technology solutions for the energy industry.
As is the case with other oil services and equipment suppliers, results for FMC Technologies are directly exposed to oil and gas prices, which are inherently volatile and subject to complex market forces. A potential drop in prices could curtail deepwater drilling and subsea equipment demand, thereby affecting the company’s revenues, earnings and cash flow.
The company also relies on its ability to develop and acquire essential products and technologies that drive its operational performance and growth. If their technologies and/or products become obsolete, or they cannot bring them to market in a timely and competitive manner, they may face severe operational and financial dilemmas.