Shell (SHEL) Awards Seatrium Contract for Gulf's Sparta FPU
Shell plc’s SHEL subsidiary, Shell Offshore Inc., selected Singapore’s Seatrium Limited (formerly known as Sembcorp Marine Ltd) for the construction and integration of the Sparta Floating Production Unit (FPU) in the U.S. Gulf of Mexico.
Under the terms of the contract, Seatrium will be responsible for the construction and integration of the hull, topsides and living quarters for Shell's Sparta semi-submersible FPU.
The Sparta FPU, featuring a single topside module on a four-column semi-submersible hull, will be equipped with Seatrium’s Goliath twin cranes, capable of lifting up to 30,000 tons. Expected to produce 90,000 barrels of oil equivalent per day, it will be situated in the Garden Banks area, 275 kilometers off the coast of Louisiana.
William Gu, executive vice president at Seatrium, expressed gratitude for the award, citing it as a testament to the company's capabilities. The project involves a single lift operation and fabrication to ensure that the FPU can withstand pressures of up to 20,000 pounds per square inch, designed for use in harsh weather conditions.
The Sparta project was discovered in 2012 by Cobalt International Energy. Shell now operates the field with a 51% stake, along with Equinor Gulf of Mexico LLC holding the remaining 49%. The final investment decision was made in December 2023, with production expected to commence in 2028, making it Shell’s 15th deepwater host in the Gulf of Mexico.
Sparta is Shell’s first development featuring all-electric compression equipment for reduced emission intensity. The move aligns with Shell’s strategy to enhance its Gulf of Mexico production, including acquiring a stake in a deepwater field and approving an offshore drilling program to boost production in the region.
Zacks Rank & Key Picks
Shell currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are The Williams Companies, Inc. WMB, Sunoco LP SUN and Murphy USA, Inc. MUSA, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Williams Companies is well-positioned to capitalize on the anticipated substantial long-term growth in U.S. natural gas demand, thanks to its impressive portfolio of large-scale projects that create significant value. The company’s debt maturity profile is in good shape with its $4.5-billion revolver maturing in fiscal 2023.
WMB’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 13.68%.
Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate stable cash flow.
SUN’s earnings beat estimates in two of the trailing four quarters and missed twice, delivering an average surprise of 28.33%.
Murphy USA is a low-cost, high-volume fuel seller, whose stations are located near Walmart supercenters. This enables the company to attract significantly more transactions than its peers. MUSA’s sourcing infrastructure is another key competitive advantage.
The company’s earnings beat estimates in two of the trailing four quarters and missed twice, delivering an average surprise of 7.04%.
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