Leading technology, engineering, procurement and construction giant, KBR, Inc. KBR recently inked a joint venture (JV) agreement with one of the world's largest oil-gas companies, State Oil Company of Azerbaijan Republic (SOCAR). The agreement entails the development of a new Azerbaijan-based engineering and support service company.
The new entity, supported by KBR and SOCAR, will offer engineering, construction supervision and project management services to the upstream, midstream and downstream oil and gas sector projects. These apart, the new company will also leverage the expertise of its creators to extend design, technical and procurement services, identify technical requirements of the projects, provide planning and cost-control services and also supervise contracts. The new company, to be developed in the city of Baku, will also function as a major educational and training centre for the workforce.
KBR management is highly optimistic regarding its positive contribution in this JV, which will aid the socio-economic development of Azerbaijan. Management also opines that KBR, by deploying its expertise, systems and procedures to support SOCAR’s projects, will play a crucial role in driving the latter’s growth. Depending on the projects awarded to the new company, bookings will be realized in the future.
The latest contract adds another feather to the cap of KBR, which has been reigning successfully in Azerbaijan since 1994, supporting multiple projects. The company holds a proven track record of providing unmatched technology & consulting, engineering & construction as well as government services. SOCAR, one of the undisputed oil and gas giants in Azerbaijan, has multiple pipelines and refineries in the republic.
These represent significant business opportunities for KBR, going forward. However, KBR faces strong competition from companies like Fluor Corp. FLR, which also won a contract from SOCAR for providing project management and contractor services to the new oil& gas processing and petrochemical complex.
KBR currently holds a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the technology sector include Dycom Industries Inc. DY and AO Smith Corp. AOS. While Dycom sports a Zacks Rank #1 (Strong Buy), AO Smith holds a Zacks Rank #2 (Buy).
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