Shell plc (SHEL – Free Report) , the British oil and gas supermajor, has awarded a multi-year operations and maintenance contract to the Japanese shipbuilding company, MODEC, to work on its Gato do Mato project in Brazil. Shell’s Brazilian subsidiary, Shell do Brasil, recently made a final investment decision on the Gato do Mato project, which is a deepwater development located in the Santos Basin offshore Brazil.
MODEC has been tasked with an operations and maintenance assignment for a floating production, storage, and offloading (FPSO) vessel, specifically designed for this project. Shell had delayed the Final Investment Decision (FID) on the Gato do Mato deepwater project in November 2022. At the time, the company stated that it planned to take an FID by the first quarter of 2025. The project is anticipated to come online in 2029.
Adhering to the timeline, Shell decided to hire MODEC to work on the hull design and all the associated topside facilities for the FPSO designed for this deepwater development. The FPSO Gato do Mato will boast a newly constructed, custom-designed next-generation hull that will support the unit’s 25-year lifespan. This FPSO is the 19th unit built by MODEC for working in Brazil. It is also the second unit developed for Shell for work in Brazilian waters.
The FPSO can produce approximately 120,000 barrels of oil per day (bopd), along with associated gas and water. The vessel will be anchored at a water depth of approximately 2,000 meters. The FPSO shall be located approximately 200 kilometers to the south of Rio de Janeiro. The crude produced from the field will be stored in the FPSO tank and offloaded in shuttle tankers, from where it will be transported to the markets.
MODEC had secured a front-end engineering design (FEED) contract for the deepwater project nearly a year ago. Following the FEED study, MODEC inked a sales and purchase agreement with Shell for the FPSO unit, specifically designed to operate in the Brazilian waters for the Gato do Mato development for 20 years.
SHEL’s Zacks Rank and Key Picks
SHEL currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are Archrock Inc. (AROC – Free Report) , Nine Energy Service (NINE – Free Report) and NextDecade Corporation (NEXT – Free Report) . While Archrock currently sports a Zacks Rank #1 (Strong Buy), Oceaneering International and NextDecade carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
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NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. The demand for LNG as a clean-burning fuel continues to grow, and the commodity is expected to play a crucial role in the energy transition process. The company’s focus on expanding its liquefaction capacity is expected to enhance its position in the rapidly growing global LNG market, enabling it to meet the rising demand for natural gas.
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