Oceaneering Announces Manufactured Products Contracts with Petrobras

Rhea-AI Summary

Oceaneering International, a leading subsea engineering and applied technology company, has secured two major contracts with Petrobras. These contracts, obtained through competitive bidding, are expected to generate between $120 million and $183 million in revenue. Oceaneering will supply 362 kilometers of steel tube and thermoplastic electro-hydraulic umbilicals, along with associated subsea distribution hardware, for Petrobras' offshore projects in Brazil. The manufacturing will occur at Oceaneering's facility in Niteroi, Brazil, with deliveries expected by Q4 2027. This accomplishment highlights Oceaneering's strong market position and commitment to quality and timely delivery.

Positive

• Oceaneering secured two significant contracts with Petrobras.
• Expected aggregate net revenue ranges between $120 million and $183 million.
• Contracts involve supplying 362 kilometers of steel tube and thermoplastic electro-hydraulic umbilicals.
• Associated subsea distribution hardware included.
• Manufacturing to take place at Oceaneering’s Niteroi, Brazil facility.
• Final delivery anticipated in Q4 2027.
• Reinforces Oceaneering’s strong position in deepwater markets.
• Demonstrates commitment to quality and timely delivery.

Negative

• Long lead time with final delivery expected only by Q4 2027.
• Potential operational risks associated with manufacturing and delivery deadlines.

Insights

Financial Analyst

The announcement of significant contracts worth between $120 million and $183 million is a positive development for Oceaneering International, Inc. The company’s ability to win competitive bids from a major player like Petrobras highlights its strong market position and the demand for its services. This could potentially drive up future revenue and profitability. Considering the manufacturing timeline and final delivery scheduled for the fourth quarter of 2027, investors should note that the financial impact will be spread over several years. The net revenue range provided suggests some uncertainties in the final contract values, which should be monitored over time for any changes. Given the current market focus on deepwater exploration and production, this contract aligns well with industry trends, which could bode well for Oceaneering’s stock performance.

Market Research Analyst

The deepwater market is experiencing a resurgence and this contract with Petrobras is a strong indicator of Oceaneering’s involvement in this sector. The commitment to supply 362 kilometers of steel tube and thermoplastic electro-hydraulic umbilicals signals robust demand for subsea distribution hardware. Such a significant order also underscores the confidence that Petrobras places in Oceaneering’s manufacturing capabilities in Brazil. Investors should consider the strategic importance of Oceaneering’s facility in Niteroi, Brazil, which is positioned to capitalize on local demand. Moreover, the long-term nature of this contract may provide revenue visibility and stability for Oceaneering, which can be appealing to shareholders looking for steady growth opportunities.

Energy Sector Analyst

This contract win is noteworthy within the energy sector, particularly in the context of global energy dynamics and Brazil’s role in deepwater oil exploration. Petrobras is a key player in the oil industry and securing a long-term contract with them suggests that Oceaneering is well-regarded in terms of technological expertise and reliability. The nature of the products – including steel tube and thermoplastic electro-hydraulic umbilicals – is critical for subsea operations, which are core to deepwater oil extraction. The successful execution of this contract could further solidify Oceaneering’s reputation and potentially lead to additional contracts in the future. Additionally, the focus on safety and timely delivery, as emphasized by the CEO, is important in maintaining industry standards and client trust.

HOUSTON--(BUSINESS WIRE)-- Oceaneering International, Inc. (NYSE:OII) announced that its Manufactured Products segment has secured two significant contracts with Petroleo Brasileiro S.A. (“Petrobras”) through a competitive bidding process. The expected aggregate net revenue is in the range of $120 million to $183 million.

Oceaneering is contracted to supply up to 362 kilometers, or approximately 225 miles, of steel tube and thermoplastic electro-hydraulic umbilicals and associated subsea distribution hardware for use in projects offshore Brazil. Manufacturing of the products is scheduled to take place at Oceaneering’s Niteroi, Brazil facility with the final delivery expected in the fourth quarter of 2027.

Reflecting on these achievements, Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "The award of these major contracts reinforces our confidence in the durability and commitment of our customers to the resurgent deepwater markets. It further demonstrates Oceaneering’s position as a trusted provider with the ability to deliver quality work in a safe and timely manner. This advances the leading-edge position of our Brazilian manufacturing operation and we look forward to supporting Petrobras on these projects."

Statements in this press release that express a belief, expectation, or intention, as well as those that are not historical fact, are forward-looking. The forward-looking statements in this press release include the statements concerning Oceaneering's: anticipated aggregate revenue from Manufactured Products contracts; work scope, production location, and delivery of contracted products; and expected start and completion dates. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on current information and expectations of Oceaneering that involve a number of risks, uncertainties, and assumptions, including risks and uncertainties related to counterparty performance under contracts and market conditions and other economic factors affecting Oceaneering's business. Should one or more of these risks or uncertainties materialize or should the assumptions underlying the forward-looking statements prove incorrect, actual outcomes could vary materially from those indicated. These and other risks are more fully described in Oceaneering's latest annual report on Form 10-K and its other periodic filings with the Securities and Exchange Commission.

Oceaneering is a global technology company delivering engineered services and products and robotic solutions to the offshore energy, defense, aerospace, manufacturing, and entertainment industries.

For more information on Oceaneering, please visit www.oceaneering.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240515654024/en/

Hilary Frisbie

Senior Director, Investor Relations

713-329-4755

Source: Oceaneering International, Inc.

FAQ

What contracts did Oceaneering secure with Petrobras?

Oceaneering secured contracts to supply 362 kilometers of steel tube and thermoplastic electro-hydraulic umbilicals and associated subsea distribution hardware.

How much revenue does Oceaneering expect from the Petrobras contracts?

Oceaneering expects to generate between $120 million and $183 million in revenue from these contracts.

When will the final delivery of products to Petrobras be completed?

The final delivery of products is expected to be completed by the fourth quarter of 2027.

Where will the manufacturing for the Petrobras contracts take place?

The manufacturing will take place at Oceaneering's Niteroi, Brazil facility.

What impact do the Petrobras contracts have on Oceaneering?

The contracts reinforce Oceaneering's market position and commitment to quality and timely delivery in the deepwater market.