Chevron Corporation (CVX) has awarded a contract to Baker Hughes (BHI) for supply of equipments to the Big Foot project in the Gulf of Mexico. The financial terms of the deal were not disclosed.
The scope of the contract covers delivery of electrical submersible pumping (ESP) systems and production packers for seven producing wells along with mud line packers for three injection wells. With this deal, ESP systems will be applied inside the wellbore in the deepwater Gulf region at a vertical depth of approximately 16,000 feet, for the very first time.
The $4 billion Big Foot venture is located at about 225 miles south of New Orleans and boasts of a production unit with capacity of 75,000 barrels of oil and 25 million cubic feet of natural gas per day. San Ramon, California-based Chevron, through its subsidiary Chevron U.S.A. holds a 60% working interest in the project.
The ESP system, to be utilized for the deepwater venture, is expected to enhance production levels and its life cycle as well as optimize asset recovery. Following the successful implementation of the technology, this system will be applied to other deepwater oil fields.
Chevron is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals, and other energy-related businesses. We expect the company to accelerate revenue and earnings growth over the next few quarters aided by the inventory of various developments projects, exposure to the majority of prolific oil and gas plays and a strong financial profile.
Hence, we expect Chevron to perform better than its peers over the next couple of months and maintain our long-term Outperform rating.
BAKER-HUGHES (BHI): Free Stock Analysis Report
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