This week the company announced that it and Baker Hughes, a GE company (known as BHGE), had been selected for early work on BP's Tortue/Ahmeyim field development off the coast of Senegal and Mauritania in West Africa. McDermott said the eventual ...
Claire Poole , Contributor Opinions expressed by Forbes Contributors are their own.
McDermott CEO David Dickson (pictured), who came in to turn around the company in 2013, has been resistant to selling it. (Photo by Bryan van der Beek/Bloomberg)
McDermott International has long been thought of as one of those energy-related engineering and construction companies that just keeps chugging along, benefiting from contracts for large offshore projects in the Middle East (including a recent one from Saudi Aramco), Asia, Mexico and elsewhere.
But recently the stock has had some new sparkle. Its shares are up 5.6% so far this year, 11% over the last 12 months, versus down performances by Schlumberger, Halliburton and TechnipFMC over those same periods.
There have been several recent developments for the Houston-based company. In December, it agreed to combine with Chicago Bridge & Iron to create a $6 billion vertically integrated onshore and offshore services provider. The deal, which also moves the company into downstream work, is expected to close next quarter.
McDermott also has won important new business. This week the company announced that it and Baker Hughes, a GE company (known as BHGE), had been selected for early work on BP's Tortue/Ahmeyim field development off the coast of Senegal and Mauritania in West Africa. McDermott said the eventual contract would be "substantial," which the company defines as being between $500 million and $750 million.
McDermott has won other business from BP recently, including a contract for the Cassia C Compression Platform off the coast of Trinidad and Tobago, which builds on its work for BP's Angelin project in the same area.
Observers have noted that McDermott partnering with the much larger Baker Hughes will allow it to better compete against the oilfield services giants, which include Schlumberger and TechnipFMC.
McDermott is an old company, having been founded by Ralph Thomas McDermott in 1923 (it previously was named J. Ray McDermott after his father). In 2013 it began a turnaround under new CEO David Dickson, a former Technip executive who aimed to reduce costs and focus on its two core areas: shallow water and deepwater.
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