Brazil’s state-run oil giant Petróleo Brasileiro S.A. - Petrobras PBR has chosen Vallourec S.A. VLOWY, the French steel tubes manufacturer, for a multi-year contract worth up to $1 billion, underscoring Petrobras’ commitment to world-class offshore oil well construction between 2026 and 2029. This agreement, as announced by Vallourec, marks the largest in terms of volumes and revenues that Petrobras has issued since adopting an open tender process, highlighting a pivotal shift in competitive sourcing for Brazil’s vital oil sector.
Scope of the Contract
The contract covers the supply of seamless pipes and VAM® premium connections ranging from 4.5" to 18", spanning carbon and stainless-steel tubulars. Vallourec will also provide engineering support, material coordination, and rig-site services, ensuring Petrobras’ offshore operations receive end-to-end solutions for both integrity and construction needs.
Vallourec’s Strategic Investment and Localized Production
Vallourec states that this success reflects its years of targeted investment in Brazil, enabling local production of advanced tubes, which were formerly imported, as reflected in its contract with Petrobras, currently carrying a Zacks Rank #3 (Hold). The company has further focused on high value-added products and reduced its output volumes to align with its strategy to reduce debt.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bolstering Brazil’s Offshore Supply Chain and Energy Ambitions
By securing this $1 billion contract, Vallourec strengthens its foothold within Brazil’s offshore supply chain and reinforces its ongoing role in supporting Petrobras’ ambitious well integrity and expansion programs.
Vallourec has a long-standing partnership with Petrobras, reflected by its previous contracts. Last year in the month of September, Petrobras awarded a similar contract to the company for the supply of premium Oil Country Tubular Goods and accessories for the development of its technically sophisticated Sepia 2 and Atapu 2 projects. Vallourec’s robust delivery of both products and services positions Brazil for future energy resilience and growth.
Key Picks
Investors interested in the energy sector might look at some better-ranked stocks like Vitesse Energy, Inc. VTS and Canadian Natural Resources Limited CNQ. While Vitesse Energy sports a Zacks Rank #1 (Strong Buy) at present, Canadian Natural carries a Zacks Rank #2 (Buy).
New York-based Vitesse Energy is an independent energy company engaged in the acquisition, development and production of non-operated oil and natural gas properties principally in the United States. The Zacks Consensus Estimate for VTS’ 2025 revenues indicates 16.6% year-over-year growth.
Calgary-based Canadian Natural is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The Zacks Consensus Estimate for CNQ’s 2025 revenues indicates 5.9% year-over-year growth.
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Petroleo Brasileiro S.A.- Petrobras (PBR): Free Stock Analysis Report Canadian Natural Resources Limited (CNQ): Free Stock Analysis Report Vallourec SA (VLOWY): Free Stock Analysis Report Vitesse Energy, Inc. (VTS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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