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McDermott Wins Saudi-Kuwaiti Deal

22 March 2012

Energy-focused engineering and construction firm McDermott International (MDR) announced that one of its units has received a full engineering, procurement, construction, and installation ("EPCI”) of a platform for Al-Khafji Joint Operations (KJO) in Hout development – an oilfield shared by Saudi Arabia and Kuwait.

The deal – whose financial terms were not disclosed – calls for McDermott to provide the full spectrum of engineering and construction services from its fabrication division in Jebel Ali, UAE. The company is scheduled to fabricate and set up more than 600 metric tons of structures that consist of a tripod jacket, deck and flare tower, along with 42 kilometers of 24-inch subsea pipeline.

Additionally, McDermott will also perform modification works on various existing platforms in the Hout field, where the average water depth is 31 meters (102 feet).

Hout – part of the Al-Khafji project – is one of the numerous offshore Neutral Zone fields that churn out a combined volume of about 350,000 barrels per day. The Texas-based engineering-to-project management service provider expects to commence installation work during the third quarter of 2013.

The order is part of McDermott’s strong and longstanding relationship with KJO that dates back to the mid 1960’s. In fact, the company sees the KJO award as recognition of its deep understanding of the field requirements, helping it to offer the most favorable solution for this project.

McDermott, which currently retains a Zacks #3 Rank (short-term Hold rating), primarily serves the worldwide offshore oil and gas field developments, including front-end design and detailed engineering, fabrication and installation of offshore drilling and production facilities, as well as installation of marine pipelines and subsea production systems.

Additionally, the company provides project management and procurement services. It operates in most major offshore oil and gas producing regions, including the U.S., Mexico, Canada, the Middle East, India, the Caspian Sea and Asia Pacific.

In August 2010, McDermott completed the spin-off of its ‘Power Generation Systems’ and ‘Government Operations’ segments into a separate, independent and publicly traded company The Babcock & Wilcox Co.