Neptune Marine Services Ltd (ASX: NMS) today announced that its Aberdeen based engineering division, Neptune Subsea Engineering, has signed a new contract with global energy major Shell UK for the provision of subsea engineering consultancy services. Under the terms of the agreement Neptune Subsea Engineering will provide Shell with a range of engineering services for an initial three year period with the option of two one-year extensions.
Neptune's Managing Director and CEO, Christian Lange, said the new partnership reinforced the well established relationship that Neptune Subsea Engineering continued to develop with Shell and reflected the expanding global capability of the broader Neptune group.
"Neptune has recently advised that it is starting to see the emergence of longer term serviced based contracts that deliver recurring and stable revenue streams. This agreement with Shell is evidence of the type of contracts we are actively pursuing," he said.
In related company news, Neptune's Aberdeen based fabrication division, Neptune Deeptech, has been awarded a contract from GE Oil & Gas for the provision of five subsea tree frames that will be installed on the deepwater Kizomba Satellites Project, offshore Angola. The Kizomba Satellites Project is operated by Esso Exploration Angola (Block 15) Limited, a subsidiary of ExxonMobil Corporation.
Under the terms of the agreement Neptune Deeptech will provide the tree frames over a period of nine months. All fabrication work for the project will be carried out at the company's Aberdeen facilities.
Mr Lange said the contract award reflected Neptune's strategic focus on investigating new and emerging opportunities in the deepwater and frontier regions of West Africa, Brazil and the Gulf of Mexico.
"Recent industry research suggests global expenditure across the world's major deepwater precincts will be more than $27 billion a year over the next four years," he explained. "Leading the charge will be Africa that is tipped to account for 40% of the total global spend.
"Projects such as this one will help to establish Neptune as a trusted provider of engineered solutions to the deepwater oil and gas industry and will provide us with additional opportunities for international expansion," he added.
Mr Lange said the new contracts were an addition to the $20 million in international projects announced recently, approximately 60% of which are due to be completed in the second half of FY2010, reflecting Neptune's second half revenue and earnings weighting.