Subsea Expo

Access. Connect. Grow.

Shell-Schlumberger Units Ink Deal

03 September 2012

A/S Norske Shell, an affiliate of Royal Dutch Shell plc, awarded a subsea equipment supply contract to Framo Engineering, a subsidiary of Houston, Texas-based Schlumberger Company. The system will be utilized for the development of the Draugen Field in Norway.

Per the deal, the scope of the contract, worth $100 million, involves delivery of a complete system for topside power and control, the power and control umbilical, as well as the complete subsea pump module and manifold.

Designed and targeted to enhance the oil production in the Draugen Field, the subsea multiphase booster pump system will be installed at a water depth of 820.2 feet.

Framo will assemble and test the subsea multiphase booster pump system at its advanced facility in Hosoey, Norway. Field installation is expected to take place in the summer of 2014.

Both the companies remain highly upbeat about this collaboration. With an efficient manpower and strong technological base, Framo remains confident of executing the contract effectively and on schedule.

Based in the Netherlands, Shell owns a strong and diversified portfolio of global energy businesses that offer attractive long-term growth opportunities. The groupís strong inventory of development projects and increased capital expenditures should help volume growth in the long run.

Schlumberger -- a leading oilfield services company -- provides technology, project management and information services to the global oil and gas industry. The company is favorably positioned to operate within the current oilfield services scenario, given acceleration in international drilling activity, pricing improvements and an expected recovery in its seismic operations.

Both Shell and Schlumberger currently hold a Zacks #3 Rank, implying a short-term Hold rating for a period of one to three months. We also maintain our long-term Neutral recommendation on the stocks.