Saipem S.p.A SAPMF, an Italy-based energy services firm, has secured a major offshore contract worth about $1 billion from Azule Energy, a 50-50 joint venture formed by Eni and BP, for the Greater PAJ development off the coast of Angola. The Greater PAJ development comprises Blocks 31 and 31/21 offshore Angola and is a major ultra-deepwater project being developed in sub-Saharan Africa.
Apart from being a significant ultra-deepwater development, the project is unique as the first integrated cross-block development in Angola. This means the project will combine resources from multiple oil fields across different licensed blocks and develop them jointly.
Per the terms of the contract, Saipem will handle the engineering, fabrication, transportation and installation of subsea infrastructure needed for production at the offshore field. Moreover, the contract includes the installation of about 180 kilometers of rigid pipelines for the transportation of hydrocarbons and other subsea equipment at the field. The installation of these structures will take place at water depths of up to 2,000 meters. The company is also responsible for transporting and installing 38 kilometers of flexible flowlines and jumpers to connect parts of the production system, and for laying 54 kilometers of umbilicals.
In addition, the company has stated that it will utilize its construction vessels, FDS and Castorone, for offshore installation work. The construction vessels are well-suited to handle technically challenging deepwater projects and have prior experience working on similar offshore developments. Saipem has also mentioned that fabrication activities will be carried out in Angola at Saipem's Ambriz fabrication yard, with plans to involve local suppliers and labor. The estimated duration of the contract is about 40 months.
The contract reinforces Saipem’s position as a leading provider of offshore engineering and construction services for complex deepwater developments. The Greater PAJ development is expected to support greater oil and gas production in Angola, helping it counter production decline from mature fields.
SAPMF’s Zacks Rank and Key Picks
SAPMF currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are YPF Sociedad Anonima YPF, W&T Offshore WTI and FuelCell Energy FCEL. While YPF sports a Zacks Rank #1 (Strong Buy), W&T Offshore and FuelCell Energy carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
YPF is a leading integrated energy company in Argentina, with operations spanning the entire oil and gas value chain. As an oil and gas producer, the company has a growing focus on shale development in the Vaca Muerta formation, while also producing conventional oil and natural gas. YPF also operates pipelines and export projects, three wholly-owned refineries, and has a nationwide retail network and petrochemical operations. The company is also expanding into LNG, power and other energy-related businesses to support long-term growth.
W&T Offshore benefits from its prolific Gulf of America assets, which offer low decline rates, strong permeability and significant untapped reserves. The company’s recent acquisition of six shallow-water fields in the Gulf of America boosts its future production prospects and is expected to enhance its revenues.
FuelCell Energy is a clean energy company that offers scalable, reliable, low-carbon power solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company’s proprietary molten carbonate fuel cell systems generate electricity through an electrochemical process instead of burning fuel, reducing carbon emissions and minimizing the environmental impact of power generation. FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.
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W&T Offshore, Inc. (WTI): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).