SLB Secures $1.5 Billion Contract for Mutriba Field Development

SLB SLB has been awarded a five-year, $1.5-billion contract by Kuwait Oil Company (KOC) to design, develop and manage production at the Mutriba field in Kuwait.

The energy equipment and service provider is leveraging its in-depth understanding of the Mutriba oil field to support development efforts in deeper, more complex subsurface conditions. The work involves dealing with intense pressure and temperature, as well as sour reservoirs.

The project aims to develop difficult and hard-to-reach oil and gas resources more quickly, while keeping costs under control and minimizing environmental impact.

The contract represents trust and cooperation between KOC and SLB, while expanding SLB’s scope of work and responsibility. Contracts like this allow SLB to generate predictable and enhanced cash flow, thereby increasing business stability.

SLB and other oilfield equipment and service companies rely heavily on capital spending by upstream energy producers, which is strongly influenced by fluctuations in oil prices. SLB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other players in the oil and gas equipment and service industrywhose revenues areinfluenced by crude price volatility are Cactus, Inc. WHD, Baker Hughes Company BKR and Halliburton Company HAL. With West Texas Intermediate crude oil prices hovering above $60 per barrel, the business environment for oil and gas exploration firms is favorable, positively impacting the business models of Cactus, Baker Hughes and Halliburton. HAL and BKR currently carry a Zacks Rank #3 each, whereas WHD has a Zacks Rank #4 (Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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