Saudi Arabia's Shoaibi Group and FMC Technologies Form Oil and Gas Services Joint Venture

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Researched by Industrial Info Resources (Sugar Land, Texas)--Saudi Arabia's Shoaibi Group (Al-Khobar, Saudi Arabia) and FMC Petroleum Equipment (Malaysia) Sdn Bhd, a wholly owned subsidiary of FMC Technologies Incorporated (NYSE:FTI) (Houston, Texas), have announced the formation of a joint venture, FMC Technologies Saudi Arabia Limited (Al-Khobar, Saudi Arabia). The joint venture will provide equipment, solutions and services in oil and gas exploration, production and development. It will also manufacture surface wellhead components, which will not only meet FMC's quality guidelines but also the global American Petroleum Institute standards. The partnership is expected to benefit from the Shoaibi Group's strong market understanding in Saudi Arabia, which will help FMC expand operations in the country.

FMC Technologies is a leading global technology company in the energy sector. Some of the equipment manufactured by the firm includes high-pressure fluid control systems, subsea process and production units, surface wellhead equipment, and measurement systems for the oil and gas sector. FMC Technologies has also been named "America's Most Admired Oil and Gas Equipment and Services Company" by the Fortune magazine in the years 2005, 2006 and 2008. The firm employs about 10,400 people in 19 manufacturing facilities in 14 countries.

FMC Technologies, which has a strong presence in the Middle East and African region, has also signed an agreement with BP Plc (NYSE:BP) (London) to supply subsea equipment for the International Block 18, jointly developed by Sonangol (Luanda, Algeria) and BP off the shore of Angola. The $140 million contract includes the delivery of pressure protection systems, two pipelines and pipeline manifold, chokes, foundation systems, and controls among other equipment. FMC's production facility in Kongsberg, Norway, will execute the order. The company is also executing an $80 million order to supply control systems, wellheads, six subsea trees, tubing hangers and other components for BP's deepwater project in Angola. The equipment will be sourced from FMC's manufacturing units in Dunfermline, Scotland, and Kongsberg, Norway.

In a recent development, the Shoaibi Group signed an agreement with ITS Energy Services (Aberdeen, Scotland) to form a joint venture, ITS Arabia Limited (Al-Khobar, Saudi Arabia), to provide drilling equipment and services to oil and gas companies in the region. ITS Energy Services, a recognized name in the supply of drilling services and equipments, has been operating in Saudi Arabia for more than three years. This joint venture is expected to help ITS Energy Services expand its market base in the country. The company will also set up a machine shop in the next 18-24 months to manufacture equipment, and to undertake repair and inspection.

In May, Algeria's state-controlled utilities company Sonatrach (Hydra, Algeria) awarded four major contracts to Shoaibi Group. According to the agreements, the Shoaibi Group will provide its state-of-the-art BlueQube technology, which will help geologists accurately identify proven oil and gas reserves in the country by carrying out geophysical surveys. Other contracts include the installation of rigless submersible pumps in oil wells, the supply of technology for calculating fluid flow dynamics, and the study of physical properties of oil and gas reservoirs.

The Shoaibi Group is one of Saudi Arabia's leading companies in oil and gas, telecommunications, petroleum and information technology. The group is also one of the founding members of Saudi United Cooperative Insurance Company, Gulf Capital, Gulf One Bank and Venture Capital Bank. The group has several operating companies, which include Software Technology Company Limited, which provides training, software development and consultancy services in the information technology sector. General Technologies and Systems Company Limited leads the group's joint venture activities, while Shoaibi Contracting Establishment handles all contracting assignments. Saudi Commercial Import Corporation was established to oversee the group's trading activities, represent leading international companies in Saudi Arabia, and also lead the group's business development efforts. Integrated Electronics Trading Company handles of the group's interests in the telecommunications industry while Petroleum Works Company Limited spearheads business activities in the petroleum sector.

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