HOUSTON, Oct. 3, 2011 /PRNewswire/ -- Dresser-Rand Group Inc. ("Dresser-Rand" or, collectively with its affiliates, the "Company") (NYSE: DRC), a global supplier of rotating equipment and aftermarket parts and services, has been awarded compression equipment and services valued at more than $700 million by TUPI B.V. (Petrobras 65% and operator, BG Group 25%, Petrogal Brasil S.A - Galp Energia 10%) and GUARA B.V. (Petrobras 45% and operator, BG Group 30% and Repsol-Sinopec 25%). The equipment, which includes up to 80 DATUM compressor trains, will be installed on eight (8) "replicant" floating, production, storage and offloading (FPSO) vessels. Six of these vessels will be located in the Lula field (formerly known as Tupi) and two in the Guara field. Training, aftermarket services and two 10-year maintenance contracts are also included as part of the award.
According to Vincent R. Volpe Jr., Dresser-Rand's President and CEO, "We are proud to announce this significant award, and, more importantly, appreciative of the confidence that Petrobras and its partners have placed in us to supply all the compression trains for all services on these eight FPSOs. We believe that this is a clear statement by a highly respected Client of their confidence in our Company's technology, execution capability and ongoing technical and field support. The award for all of the compression trains on this project reflects our Company's strength of offerings in the Upstream Segment, which we project will be the largest area of growth in the Oil and Gas markets in the coming years."
According to Jesus Pacheco, Dresser-Rand's executive vice president, New Equipment Worldwide, "We believe in the value proposition our technology can bring to our end user Clients in this market. On this program, we bring proven leading-edge technology to increase the throughput, maintainability and reliability of these key assets. Building on previous compression solutions we have delivered for the Petrobras Pilot I, II and III FPSOs, we again eliminated the need for additional topsides equipment, specifically, separate CO2 pumping systems, saving space and weight, reducing the complexity of the overall plant, while increasing reliability. As the sole solutions provider for all topsides compression equipment, we are able to ensure all services are fully integrated to optimize overall plant operability. In addition, we have also maximized standardization of spare parts, maintenance practices and control systems to reduce inventory and maintenance costs.
"It is also important to note the positive impact this technology has on making these assets more environmentally sustainable. Higher compressor efficiencies possible by the use of our DATUM product line reduce the carbon footprint of these FPSOs as they require less power to meet the specified duties. With higher efficiency, better maintainability and higher reliability, and a smaller carbon footprint, we directly contribute to reducing the life cycle costs of the assets, which makes our Clients more competitive in the markets they serve."
Consistent with the Company's commitment to support localization initiatives in its served markets, a high portion of added value on this program will be performed in Brazil. This will include sourcing, project management and engineering, further development of local service support capabilities and packaging in a newly planned facility in the Industrial Corridor near Sao Paulo, which will further expand the Company's in-country service capabilities.
On September 6, 2011, Dresser-Rand disclosed that it had been selected as the supplier for all the compression needs of these FPSOs. However, at the time, the Company cautioned that any actual award remained subject to the approval of Petrobras' Board of Directors and its Partners. Those approvals have now been obtained. More than $400 million and $70 million will be reflected in its third quarter 2011 New Units and Aftermarket bookings, respectively. The Aftermarket booking amount is consistent with the Company's accounting policy to only book the portion of the Aftermarket orders that will be delivered in the first 15-months of long-term service agreements.
On the basis of this project the Company reiterates its guidance that the new unit bookings for 2011 may be at the top end of, or even exceed, the guidance previously provided of $1.4 to $1.6 billion.
Dresser-Rand is among the largest suppliers of rotating equipment solutions to the worldwide oil, gas, petrochemical, and process industries. The Company operates manufacturing facilities in the United States, France, United Kingdom, Spain, Germany, Norway, India, and China, and maintains a network of 45 service and support centers (including 6 engineering and R&D centers) covering more than 140 countries. Dresser-Rand has principal offices in Paris, France, and Houston, Texas.
This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, the Company's plans, objectives, goals, strategies, future events, future revenue, or performance, capital expenditures, financing needs, plans, or intentions relating to acquisitions, business trends, executive compensation, and other information that is not historical information. The words "anticipates", "believes", "expects," "intends", "appears", and similar expressions identify such forward-looking statements. Although the Company believes that such statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include, among others, the following: potential for material weaknesses in its internal controls; economic or industry downturns; the variability of bookings due to volatile market conditions, subjectivity Clients exercise in placing orders, and timing of large orders; volatility and disruption of the credit markets; its inability to generate cash and access capital on reasonable terms and conditions; its inability to implement its business strategy to increase aftermarket parts and services revenue; its ability to implement potential tax strategies; competition in its markets; failure to complete or achieve the expected benefits from any future acquisitions; economic, political, currency and other risks associated with international sales and operations; fluctuations in currencies and volatility in exchange rates; loss of senior management; environmental compliance costs and liabilities; failure to maintain safety performance acceptable to its Clients; failure to negotiate new collective bargaining agreements; unexpected product claims and regulations; infringement on its intellectual property or infringement on others' intellectual property; its pension expense and funding requirements; difficulty in implementing an information management system; and the Company's brand name may be confused with others. These and other risks are discussed in detail in the Company's filings with the Securities and Exchange Commission at www.sec.gov. Actual results, performance, or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. The Company can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them does, what impact they will have on results of operations and financial condition. The Company undertakes no obligation to update or revise forward-looking statements, which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events except as required by applicable laws. For information about Dresser-Rand, go to its website at www.dresser-rand.comwww.dresser-rand.com.
SOURCE Dresser-Rand Group Inc.
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