Seatrium's shares rose sharply after the Singapore shipyard group signed a preliminary agreement with British oil major BP for a second deepwater floating production unit project in the U.S. Gulf of Mexico.
The Singapore-based company said early Thursday that it will provide engineering, procurement, construction and commissioning services for the Tiber floating production unit, which will support the development of BP's deepwater assets in the gulf.
The deal builds on Seatrium and BP's partnership on the Kaskida floating production unit. In December, Seatrium won the contract for engineering, procurement, construction and onshore commissioning works for the Kaskida FPU project.
The Tiber contract award is subject to BP's final investment decision, which is expected to be made later this year, Seatrium said.
By midday, shares in Seatrium were 7.8% higher at 2.48 Singapore dollars, equivalent to US$1.83, on the news.
Investors are optimistic about Seatrium, said Chok Wai Lee of Morningstar. The company has shown its ability to secure repeat customers due to its proven track record and technological capabilities, the director of equity research for Greater China said.
Given the market's high expectations, however, Seatrium will need to consistently achieve order-book wins for its shares to continue their upward trend, Lee said.
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