Sembcorp Marine & Shell Offshore ink a deal for Shell’s Vito FPU

Sembcorp Marine Limited, a division of Sembcorp Industries, has apparently entered into an agreement with Shell Offshore Inc., a crude oil & natural gas producer and a division of Royal Dutch Shell PLC. The deal has been signed to cooperate on floating production unit operations, as reported by some of the key officials of SembCorp Marine, who have also further added that the firm will be constructing & combining the hull, topsides, and living quarters of Shell’s Vito semi-submersible FLU (Floating Production Unit).

The terms & conditions of the agreement include the deployment of Shell-furnished instrument followed by a letter of intent signed by the two parties in December last year.  Reportedly, the new floating production unit is projected to be set up at a water depth of over twelve hundred meters across the Mississippi Canyon Block 984 near the Gulf of Mexico.

While it is speculated that both the firms will benefit through the deal, it would not have any material impact on the overall tangible assets as well as earnings per share by December end of this year. William Gu, Senior Vice President of Sembmarine’s Rigs & Floaters division, has stated that the firm remains totally committed towards effective as well as safe execution & delivery of Shell’s Vito FPU project.

Though both the firms have not revealed the estimated value of the agreement, it has been speculated that the deal will be evaluated at USD 300 million, that may bring year-to-date order awards to nearly USD 900 million.

For the record, SembMarine has been awarded three contracts that encompasses FPSO hull & living quarters last year in December estimated at USD 490 million, Technip FMC’s FPSO living quarters worth USD 476 million, and the current Shell Vito project forecast at nearly USD 300 million to USD 350 million. In fact, the firm has won three contracts worth USD 1.6 billion since the last 6 months.