GE Oil & Gas Signs $30 Million Frame Agreement with Shell Brasil for Offshore Exploration and Development Projects
o Estimated Quantity of 26 Subsea Wellhead Systems to be Provided for Deepwater Projects
o Agreement Underlines GE's Position as a Leading Supplier for Offshore Brazil
RIO DE JANEIRO, BRAZIL - June 14 , 2011 - GE Oil & Gas has signed a three-year frame agreement valued at approximately $30 million to supply 26 subsea wellhead systems and associated services to Shell Brasil Ltda. for exploration and production projects offshore Brazil. The agreement means GE Oil & Gas will supply all Shell Brasil's requirements for subsea drilling systems for all offshore exploratory and development wells to be drilled by Shell Brasil at least until the end of 2013.
Under the agreement, GE will supply 13 MS-700 Slimbore and 13 MS-700 deepwater high capacity (DWHC) systems. The GE MS-700 is the only subsea wellhead system on the market with metal-to-metal sealing, and has demonstrated high reliability for projects offshore Brazil.
Suheyl Ozyigit, Wells Delivery Manager for Shell Brasil said: "Based on our previous experiences, we are confident that the new agreement with GE will help us to reach our ongoing exploration and production goals. The agreement also meets our delivery requirements, provides competitive pricing and includes substantial local content."
Fernando Martins, Vice President - Latin America, Drilling & Production, GE Oil & Gas, said: "We're very pleased to again have been selected to help Shell Brasil achieve its deepwater production goals. The new frame agreement builds upon our successful relationship with Shell Brasil and further supports our growing role as a technology supplier for projects offshore Brazil, one of the world's most active oil and gas development regions."
GE's MS-700 technology offers high flexibility in terms of casing programs and is designed to help Shell Brasil reach exploratory and development targets in ultra-deep water reservoirs efficiently, saving operational rig time and costs. Most of the new projects will be located in the Santos and Campos basins offshore Brazil.
Under the new frame agreement, Shell Brasil will be able to leverage the operational lessons learned and benefits coming from earlier applications of the same MS-700 Slimbore technology. GE had a similar contract with Shell Brasil from 2007-2010 for the supply of wellhead systems for the BC-10 phase 1 development.
Much of the equipment will be manufactured at GE's facility in Jandira, São Paulo State, Brazil. Shipments are expected to start by September 2011.
The latest agreement with Shell Brasil underlines GE's position as a leading supplier of subsea drilling systems for offshore operators in Brazil. Since 2007, when GE acquired VetcoGray, the GE drilling & production business has provided more than 300 subsea wellhead systems to 11 different operators for projects offshore Brazil.
Underscoring its commitment to Brazil, GE has announced that it plans to invest $500 million to expand its operations in the country, including the establishment of a multi-disciplinary Research and Development Center in Rio de Janeiro. Among the focus areas for the new center will be advanced technologies for the oil and gas sector. In addition, GE's recent acquisition of Wellstream, a leading producer of flexible pipe equipment, significantly expands GE's capabilities to serve the Brazilian offshore market.
About GE
GE (NYSE: GE) is an advanced technology, services and finance company taking on the world's toughest challenges. Dedicated to innovation in energy, health, transportation and infrastructure, GE operates in more than 100 countries and employs about 300,000 people worldwide. For more information, visit the company's Web site at www.ge.com.
About GE Energy
GE also serves the energy sector by providing technology and service solutions that are based on a commitment to quality and innovation. The company continues to invest in new technology solutions and grow through strategic acquisitions to strengthen its local presence and better serve customers around the world. The businesses that comprise GE Energy www.ge.com/energy - GE Power & Water, GE Energy Services and GE Oil & Gas - work together with more than 90,000 global employees and 2010 revenues of $38 billion, to provide integrated product and service solutions in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as water, wind, solar and biogas; as well as other alternative fuels and new grid modernization technologies to meet 21st century energy needs.
About GE Oil & Gas
GE Oil & Gas (www.ge.com/oilandgas) is a world leader in advanced technology equipment and services for all segments of the oil and gas industry, from drilling and production, LNG, pipelines and storage to industrial power generation, refining and petrochemicals. GE Oil & Gas also provides pipeline integrity solutions, including inspection and data management, and designs and manufactures wire-line and drilling measurement solutions for the oilfield services segment. GE Oil & Gas exploits technological innovation from other GE businesses, such as aviation and healthcare, to continuously improve oil and gas industry performance and productivity. GE Oil & Gas employs more than 20,000 people worldwide and operates in over 100 countries.
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