SBM Offshore Wins Production Vessel Order For Exxon Mobil

SBM offshore
Dutch marine engineer SBM Offshore said July 3 it has won a contract to supply a new production vessel for oil major Exxon Mobil Corp. in Guyana, setting its shares on track for their biggest gain in nearly two years.
Under the terms of the deal, SBM will engineer and design a second FPSO for the Liza oil and gas field in Guyana’s Stabroek block.
Following government approval, the company will also construct and install the vessel and will operate it for two years, after which the ownership will transfer to Exxon subsidiary Esso Exploration and Production Guyana Ltd.
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Financial details of the contract were not disclosed.
The deal is “very positive” for SBM, KBC Securities analyst Cedric Duinslaeger said in a note, as the new FPSO will be considerably larger in size than the first one Exxon Mobil ordered from SBM for the Liza field.
The shares are down more than 4% on the year, as the company is still awaiting the conclusion of a Brazilian investigation into its role in corruption cases. The probe has forced it to suspend its involvement in tenders with Brazilian oil company Petrobras (NYSE: PBR), a major customer.
In 2014, SBM paid $240 million to Dutch and U.S. authorities in an out-of-court settlement related to bribery in Brazil, its largest market, where oil company Petrobras was its main client.