STX OSV

STX OSV: CIMB maintains Out Perform with $2.09 TP. House note that tasked with accelerating Brazil’s oil production, Graça Foster, the first female CEO of Petrobras, is living up to her namesake as the iron lady of oil. Upstream reported that Petrobras has made an U-turn on the local content requirement for its 7-PLSV tender (comprising of 550-tonne and 650-tonne). The original plans were for all the units to be built locally. It could now be reduced to one Brazil-built and six international-built. The new bids are expected to be submitted by end-Sep. Results could be known by yr-end. House note that the news bodes well for STX OSV, allowing its EU and Vietnam operations to participate in the Brazilian buzz (less the overheated environment). Already, its current Brazil yard is booked till end-2013 and faces space constraints for building multiple units in larger categories. Further, this tender has drawn interests from SOH’s customers including DOF subsea, Technip and Saipem. Positive developments on their part could spill-over to SOH (esp. for close-customer DOF). Separately, note that Petrobras has displayed a greater sense of urgency to meet its production target (this can also be gleaned from its accelerated FPSO-integration awards)