McDermott (MDR) Secures New EPCI Contract in Arabian Gulf
Tuesday 14 November 2017
Energy-focused engineering and construction company McDermott International, Inc. MDR recently announced that it has received an engineering, procurement, construction and installation ("EPCI") contract from a customer in the Middle East. The news follows the company's strong third-quarter results, which showed a 72% year-over-year increase in quarterly revenues.
McDermott's customer in the Middle East, possibly Saudi Aramco, has provided the contract for a project in the Safaniya oil field in the Arabian Gulf. Although the financial details of the deal are yet to be announced, the project is expected to be worth $750 million to $1.5 billion. It is part of Saudi Aramco's new $4.5 billion worth energy-related agreements.
McDermott will start working on the project immediately. Per the company, the impact of the project will be reflected in its fourth-quarter 2017 backlog. In this context, we would like to remind investors that as of Sep 30, McDermott had a backlog of $2.4 billion. While 85% of the total backlog is related to offshore operations, the remaining 15% pertains to subsea operations.
The company's strong foothold in the Middle East is expected to enable it to execute the project smoothly with its engineering and procurement teams in Dubai, Chennai and Al Khobar, Saudi Arabia. Per the company, its facilities in Saudi Arabia's Dammam and Jebel Ali, located in Dubai will carry out the construction work while its vessels will be charge of installation.