GE Inks $500 Million Turbomachinery Equipment Deal with Petrobras
Published Tuesday, 15th January 2013 08:52 pm - © 2013 Dow Jones
By Ben Fox Rubin
General Electric Co. (GE) said it won a contract worth more than $500 million to supply turbomachinery equipment and services to Petroleo Brasileiro S/A (PBR, PETR3.BR), continuing to expand its relationship with the state-run Brazilian energy company.
The contract will serve the four new floating production storage and offloading units in the Cessao Onerosa region of the Santos Basin pre-salt fields in the state of Sao Paulo.
The contract, which builds upon an existing partnership between the two companies, follows a September deal in which GE signed a subsea wellhead production contract with Petrobras worth nearly $1.1 billion.
"Our focus is to seek partnerships like this, where GE can offer its expertise to support the economic development of Brazil," said Reinaldo Garcia, president and CEO of GE Latin America. "The country continues to assume an increasingly strategic position to the company's business globally, and Petrobras is one of the most important partners we have."
GE Oil & Gas will supply the main turbomachinery equipment to the four new FPSOs. The technology will generate primary energy for the FPSOs. In addition to core equipment, the new contract includes technical assistance for installation and commissioning start-up and services, such as repair, local field service engineers and customer training.
GE Oil & Gas is expanding its operations in Brazil to meet growing demand for oil-field equipment and services, especially from Petrobras.
GE said in October its third-quarter earnings rose on improved profit margins at the conglomerate's industrial businesses, although total orders for new equipment and services slipped, and overall revenue was short of Wall Street's forecasts.
Shares closed Monday at $21.12 and were down 0.4% premarket. As of the close, the stock was down 6.7% over the past three months.
Write to Ben Fox Rubin at firstname.lastname@example.org
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