CAM Cameron International Corp.

Oilfield services company National Oilwell Varco (NOV) announced that it has struck a deal to supply equipment for seven drillships to premier Brazilian shipyard firm Estaleiro Atlantico Sul.

The $1.5 billion contract – the largest single order ever in National Oilwell’s history – requires the company to provide supply packages that include drilling riser and pressure control equipment.   

National Oilwell Varco, which ranks ahead of Cameron International Corp. (CAM) as the biggest U.S. maker of oilfield equipment, believes that Brazil's significant deepwater finds over the past several years have made it one of the most attractive offshore destinations it serves.

Recent discoveries include the Lula field (discovered in 2006) with 5 - 8 billion barrels of recoverable reserves and the Lara field (discovered in 2008) with another 3 - 4 billion barrels, along with other finds like the Caramba field, the Carioca field and the Guara field.

These large deepwater reservoirs have led to a boom in demand for new drilling rigs and other associated equipment. Spiraling oil prices during the last year has added to the positive sentiment. As a result, National Oilwell is investing heavily in Brazil to prepare for the market's rapid growth. With a number of potential contract extensions, the company expects to log more new deals from Brazil in the coining quarters.

Houston, Texas-based National Oilwell Varco, formerly National Oilwell, is a world leader in the design, manufacture and sale of comprehensive systems, components, products and equipment used in oil and gas drilling and production worldwide.

The company reached its current form following the March 2005 merger between National Oilwell and Varco International. National Oilwell Varco organizes its operations in three business segments: Rig Technology, Petroleum Services & Supplies, and Distribution Services.

National Oilwell Varco shares currently retain a Zacks #1 Rank, which translates into a short-term Strong Buy rating. We are also maintaining our long-term Outperform recommendation on the stock.

 
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