HOUSTON - SLB (NYSE: SLB), a global technology company in the energy sector, has been awarded a contract by Equinor for the front-end engineering design (FEED) of an all-electric Subsea Production Systems (SPS) project at the Fram Sør field, offshore Norway. The project announced on a recent Monday, is aimed at advancing the global adoption of electric subsea technology, which is expected to enhance operational efficiency and reduce emissions from subsea operations.
The 12-well project is the first to emerge from a joint industry project initiated in 2018, which saw collaboration between major industry players to hasten the development of electrification technology with a standardized solution. This standardization is anticipated to facilitate the scaling of subsea electrification and bring about cost benefits in capital and operational expenditures.
Mads Hjelmeland, CEO of SLB OneSubsea, highlighted the significance of electrification for the future of subsea operations within the broader context of the energy transition. He praised the six-year collaboration with Equinor and other industry partners that has culminated in this development. Hjelmeland emphasized that the technology is akin to creating the "Internet of Things" for subsea trees, offering operators enhanced control through real-time performance and condition monitoring.
The Fram Sør field will utilize SLB OneSubsea's standard subsea tree design, which will be upgraded with a fully electrified power, control, and actuation system. The removal of high-pressure hydraulic systems is expected to enable operations at greater depths and distances, potentially making even marginal fields economically viable.
SLB, with a presence in over 100 countries, focuses on energy innovation, digital technologies, decarbonizing industries, and developing new energy systems. SLB OneSubsea, a joint venture supported by SLB, Aker Solutions, and Subsea7, is headquartered in Oslo and Houston, employing around 10,000 people globally.
This announcement is based on a press release statement.
In other recent news, the U.S. energy sector has seen a flurry of acquisitions and mergers, with companies such as Northern Oil and Gas, Tallgrass Energy, Ameredev II, and Noble Corp (NYSE:NE) making significant purchases.
Schlumberger Limited (NYSE:SLB) is also making strategic moves with its $8.2 billion acquisition of CHX, which has been positively received by analysts from RBC Capital Markets. These developments are part of a larger trend of consolidation within the sector, following a record $250 billion in deals in 2023.
Citi has adjusted its price target for SLB to $62, while maintaining a Buy rating. The firm's analysis indicates a recovery in Drilling & Measurements margins and an increase in Production Systems margins. Meanwhile, Benchmark has sustained a Buy rating on SLB shares, highlighting the stock's low valuation as a potential catalyst for a rebound.
Barclays has also shown confidence in SLB's future performance, maintaining an overweight rating with a price target of $70.00. SLB's inclusion in BMO Capital Markets' "BMO Top 15 List" further underscores the bullish outlook within the Oil Field Services sector. These recent developments provide a snapshot of the dynamic landscape of the U.S. energy sector, with a focus on SLB's market position and strategic initiatives.
InvestingPro Insights
SLB (NYSE: SLB), while focusing on the future of energy efficiency and innovation with its new contract for an all-electric Subsea Production Systems project, also presents a mixed financial outlook based on recent data. The company's commitment to advancing electric subsea technology and its potential impact on operational efficiency and emissions is mirrored by its steady financial performance and market stability.
InvestingPro Data highlights that SLB has a market capitalization of $66.08 billion, reflecting its significant presence in the energy sector. The company's P/E ratio stands at a stable 15.27, suggesting that the market holds its earnings in high regard. Moreover, SLB has experienced a robust revenue growth of 13.02% over the last twelve months as of Q1 2024, indicating a strong financial position during this period.
Among the InvestingPro Tips, it's noteworthy that SLB has maintained dividend payments for an impressive 54 consecutive years, which may be of particular interest to investors seeking reliable income streams. Additionally, SLB's stock is known to trade with low price volatility, providing a sense of security for investors in an often fluctuating energy market.
For readers interested in a deeper dive into SLB's financial metrics and additional insights, there are 6 more InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/SLB. These tips could provide further guidance on the company's performance and potential investment opportunities. Moreover, users can take advantage of an additional 10% off a yearly or biyearly Pro and Pro+ subscription with the coupon code PRONEWS24.
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