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Vallourec (VLOWY) Extends Tubular Supply Contract With ADNOC

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Vallourec S.A. (VLOWY - Free Report) , the French tubular solutions provider, has secured a two-year contract extension with the UAE oil giant, Abu Dhabi National Oil Company (“ADNOC”). The contract, originally signed in 2019, was valued at $900 million. The extension will be effective from January 2025 and last until 2027.

Per the terms of the agreement, VLOWY will continue to supply the full range of tubes and connections to ADNOC. These tubes will support both conventional and complex applications in ADNOC’s onshore and offshore fields.

The contract has been amended to expand the scope of supply and add new terms. It includes additional services such as local pipe coating and Vallourec’s new digital solutions (such as Tallyvision) implementation. VLOWY’s digital solutions allow for full traceability of each tube used, thereby streamlining the installation process.

In addition to the extension, Vallourec has secured a new order from the UAE oil giant to supply 27,000 tons of tubes. The tubes will be produced at VLOWY’s plants in France, Brazil, China and Indonesia, with deliveries starting at the end of 2024.

Vallourec emphasized that the contract extension reflects the value it provides through its integrated tubes and services. The company is committed to expanding its services and maintaining its strong partnership with ADNOC in Abu Dhabi.

Vallourec has recently secured several contracts for supplying tubes to major oil companies, including ExxonMobil Corporation for its Whiptail project in Guyana and Equinor for its Brazilian projects.

Zacks Rank and Key Picks

Currently, VLOWY carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Archrock Inc. (AROC - Free Report) , SM Energy (SM - Free Report) and Hess Midstream Partners LP (HESM - Free Report) . Archrock presently sports a Zacks Rank #1 (Strong Buy), while SM Energy and Hess Midstream 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.

SM Energy is an upstream energy firm operating in the prolific Midland Basin region and the South Texas region. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.

Hess Midstream owns, operates, develops and acquires a wide range of midstream assets, providing services to Hess Corporation and other third-party customers. The partnership has a stable fee-based revenue model secured via long-term commercial contracts. Since Hess Midstream operates through 100% fee-based contracts, it is exposed to minimal commodity price risks.

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