SINGAPORE, Jan 23 (Reuters) - Singapore's Keppel Corp Ltd , the world's top offshore drilling rig builder, boasts an $11 billion order book that will likely lift profits this year as those rigs start to take shape.
There is one order that isn't on the books: the company's first drillship - designed to probe for oil and gas in deep water - which Keppel is building before even landing a customer. With a likely price tag above $500 million, it's a big bet that demand is hot enough to warrant the speculative risk, and a challenge to South Korean rivals who dominate this segment.
Keppel's forte is jackup rigs - mobile platforms on extendable legs - which are made for shallower water up to about 500 feet (152 meters). Drillships can operate in water as deep as 12,000 feet.
Deepwater projects accounted for 44 percent of global spending on offshore oil and gas field development last year, and that's expected to rise to more than 54 percent by 2018, according to Infield Systems, an energy research firm.
Consultancy Douglas Westwood forecasts global spending on offshore oil and gas exploration and production will grow 15 percent this year to $135 billion, and hit $164 billion in 2016.
Two of Keppel's big South Korean rivals, Samsung Heavy Industries Co Ltd and Daewoo Shipbuilding & Marine Engineering Co Ltd, have started building jackup rigs, prompting Keppel to test out deeper waters.
"After Samsung and Daewoo broke into the jackup market, Keppel is trying to hit back and show they can break into the drillship market and have the ability to compete with the South Korean yards," said James Hearn, an Infield analyst.
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