Energy-focused engineering and construction firm McDermott International Inc. MDR announced the receipt of a contract from integrated energy behemoth Chevron Corp. CVX to supply subsea technological solutions for the expansion of its Jack/St. Malo project located in deepwater U.S. Gulf of Mexico (GoM). McDermott, which already has a strong presence in GoM, said that the deal includes the development of subsea umbilicals, manifolds, jumpers and flying leads.
Among the largest in the region – the Jack/St. Malo developments are located at a water depth of roughly 7,000 feet in the Walker Ridge area, south of New Orleans, LA. The fields have the potential to reach production levels of 94,000 barrels of crude oil and 21 million cubic feet of natural gas per day in due course.
Chevron has a 50% working interest in the Jack field and 51% in St. Malo. The fields have an estimated production life of over 30 years and are likely to yield over 500 million oil-equivalent barrels with the available technology. First oil and natural gas production was achieved late last year.
McDermott, while including the value of the award in its first quarter 2015 backlog, expects to commence installation work during the second quarter of 2016. The order is part of the Texas-based engineering-to-project management service provider’s strong and longstanding relationship with Chevron as part of which the former carried out a subsea project – installing some of the industry’s biggest and most sophisticated umbilical end terminations in 7,200 feet of water – in the Jack and St. Malo fields’ original development last year. In fact, McDermott sees the latest award as recognition of its deep understanding of the challenging deepwater requirements, helping it to offer the most favorable solution for this project.
North Ocean 102, McDermott’s subsea construction vessel, is slated to transport and install 30 miles of umbilicals and related flying leads. The company’s Gulfport Spoolbase in Mississippi is responsible for completion of the final jumper assembly before being fitted by McDermott’s Derrick Barge 50 utilizing its deepwater lowering system.
McDermott, which currently retains a Zacks Rank #3 (Hold), primarily serves the worldwide offshore oil and gas field developments, including front-end design and detailed engineering, fabrication and installation of offshore drilling and production facilities, as well as installation of marine pipelines and subsea production systems.
Additionally, the company provides project management and procurement services. It operates in most major offshore oil and gas producing regions, including the U.S., Mexico, Canada, the Middle East, India, the Caspian Sea and Asia Pacific.
In August 2010, McDermott completed the spin-off of its ‘Power Generation Systems’ and ‘Government Operations’ segments into a separate, independent and publicly traded company The Babcock & Wilcox Co. BWC. Earlier this year, McDermott combined with General Electric Co. GE to launch a new oil and gas consulting venture.
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