Saipem S.p.A SAPMF, an Italian engineering and construction services company, has secured a major offshore contract from Saudi Aramco. The contract, worth approximately $2 billion, falls under the existing Long-Term Agreement (LTA) between Saipem and Aramco.

The contract covers the development of the Marjan field in Saudi Arabia. The Marjan oil and gas field is located off the East Coast of Saudi Arabia. Saipem had previously secured a contract from Saudi Aramcothat involved the installation of subsea infrastructures at the Marjan, Zuluf and Safaniyah oil fields.

Details of the Contract

The work for the Marjan field development includes the engineering, procurement, construction and installation of topsides and jackets for the wellhead platform. Saipem is also responsible for the installation of jacket and topside for the tie-in platform. Further, the scope of work outlines the installation of rigid flowlines for the transportation of oil and gas, as well as the laying of submarine composite cables and fiber optic cables for the project.

The contract was awarded to Saipem following a competitive bidding process. SAPMF had to fulfill certain preliminary conditions set by the client to secure the deal. For this project, Saipem will be utilizing its local offshore fleet, which includes its advanced dynamic positioning vessels. The Italian firm has highlighted that it will leverage its cutting-edge welding technology and engineering knowledge for the development of the Marjan field.

The fabrication work will be carried out at Saipem’s fabrication yard in Saudi Arabia, known as Saipem Taqa Al-Rushaid Fabricators. According to the company, carrying out fabrication activities locally should enhance the capabilities of the local industry.

SAPMF’s Zacks Rank and Key Picks

Currently, SAPMF carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are PEDEVCO Corp. PED,TechnipFMC FTI and VAALCO Energy EGY. PEDEVCO presently sports a Zacks Rank #1 (Strong Buy), while TechnipFMC and VAALCO Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. The company stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations. Combined with bullish oil prices, this is expected to boost the company's production and overall profitability.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a record high of $13.9 million in the second quarter of 2024, indicating a year-over-year increase of 4.51%. This growing backlog ensures strong revenue growth for FTI in the future.

VAALCO Energy is an independent energy company involved in upstream business operationswith a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.

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