BP Taps Seatrium for Early Engineering on Gulf of Mexico FPU
BP plc’s (BP) subsidiary BP Exploration & Production has awarded a significant contract to Seatrium, Singapore’s state-owned marine and offshore contractor, for early engineering work on its new floating production unit (“FPU”). This FPU is destined for BP's deepwater Kaskida project in the U.S. Gulf of Mexico.
BP’s Kaskida project, currently in the concept selection phase, marks a pivotal step in the company’s strategy to harness the potential of this deepwater field. The recent letter of intent (LOI), granted to Seatrium, includes preliminary engineering tasks, setting the stage for a more comprehensive contract covering engineering, procurement, construction, and commissioning (EPC) of the FPU Kaskida.
While this LOI represents a milestone, Seatrium has clarified that it should not materially impact the company’s net tangible assets or earnings per share in 2024. The transition from LOI to EPC contract is contingent upon several factors, including mutually agreed terms, management approval and BP's final investment decision for the project.
The Kaskida development is situated approximately 250 miles southwest of New Orleans, in the Keathley Canyon area of the Gulf of Mexico. It is expected to feature a single topside module, supported by a four-column semi-submersible hull, with subsea production wells located in water depths of around 6,000 feet.
William Gu, executive vice president of Oil & Gas (International) at Seatrium, conveyed his excitement regarding the collaboration. He expressed satisfaction in securing the LOI with BP for the Kaskida development. Gu emphasized that this recognition validates Seatrium's expertise and successful history in delivering complex FPUs. He also highlighted Seatrium's established position as a market leader in EPC projects for FPUs and expressed anticipation for contributing to the success of the Kaskida project.
This engagement with BP adds to Seatrium’s impressive portfolio of recent contracts. With BP's continued investment in deepwater projects and Seatrium's proven expertise in delivering complex offshore units, the collaboration on the Kaskida project marks another milestone in the development of advanced offshore oil and gas production technologies. The successful execution of the Kaskida project could further cement Seatrium’s position as a leader in the global offshore engineering market and reinforce BP's strategic initiatives in the Gulf of Mexico.
Zacks Rank & Key Picks
BP currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, SM Energy Company SM and Sunoco LP SUN. While Archrock and SM Energy currently sport a Zacks Rank #1 (Strong Buy) each, Sunoco carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
The Zacks Consensus Estimate for AROC’s 2024 EPS is pegged at $1.07. The company has a Zacks Style Score of A for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $6.63. The company has a Zacks Style Score of B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $5.15 and $4.48, respectively. The partnership has witnessed upward earnings estimate revisions for 2025 in the past seven days.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
BP p.l.c. (BP) : Free Stock Analysis Report
Sunoco LP (SUN) : Free Stock Analysis Report
SM Energy Company (SM) : Free Stock Analysis Report
Archrock, Inc. (AROC) : Free Stock Analysis Report
