National Oilwell And GE To Offer Improved FPSO Solutions

Energy equipment maker National Oilwell Varco Inc. (NYSE:NOV) has teamed up with General Electric Company (NYSE:GE) to offer solutions for Floating Production Storage and Offloading (FPSO) vessels. This collaboration will likely lower the expenses of deepwater oilfield developments significantly.

Both companies believe that the collaboration will likely provide industry-leading topside systems with repeatable deliveries, economies of scale and standardized interfaces. This is expected to considerably trim risks related to delay in construction and hazards related to the overrun of cost for clients working with deepwater oil and gas projects.

It is anticipated that the firms will offer services together by the first half of 2017. Both players look forward to providing top class services to overcome challenges that their clients face in the offshore oil and gas industry.

Houston, TX based National Oilwell is a world leader in the design, manufacture, and sale of comprehensive systems, components, products, and equipment used in oil and gas drilling and production worldwide. It is to be noted that the company’s large installed base of rigs worldwide provides for a steady recurring revenue stream through demand for maintenance, parts and other expendable products.

However, with new competitors entering the market and reduction of capital expenditure by drilling contractors, National Oilwell Varco has seen its new equipment package pricing fall around 10% below the peak levels achieved during 2007–2008.

NATL OILWELL VR Price

As a result, National Oilwell carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Some better-ranked players in the oil field machineries and equipment sector include McDermott International Inc. (NYSE:MDR) and Natural Gas Services Group Inc. (NYSE:NGS) . Both stocks sport a Zacks Rank #1 (Strong Buy).