Keppel Wades Into Deep Water To Battle Korean Rivals

Keppel declined to comment on its drillship ambition and referred to a press release issued last month in which Chow Yew Yuen, head of Keppel Offshore & Marine, said Keppel was offering a differentiated design. "Since the launch of our design earlier this year, we have received a very encouraging response from the market, and we have decided to start constructing the first drillship to this design," he said then.

Keppel hopes that enhancements such as the integration of high-capacity blowout preventers (BOPs) - safety valves designed to avert deepwater disasters like the 2010 Gulf of Mexico oil spill - will appeal to customers looking beyond the standard drillships that Korean yards offer, brokers said.

Keppel's drillship can handle BOPs designed to withstand pressure of up to 20,000 pounds per square inch, which is above the 15,000 psi of BOPs installed on new drillships today and double the capacity on the majority of units in operation now.

And Then There's China

In recent years, Keppel and crosstown rival Sembcorp Marine Ltd have seen their dominance in the jackup market chipped away by mainly Chinese shipyards, who have turned to rig building as demand for container ships, dry bulk carriers and oil tankers remains depressed.

As of mid-December, Chinese yards had won 38 of the 78 jackup orders placed globally in 2013, ahead of Singapore's 30. Among the 131 jackups under construction around the world, 61 were at Chinese yards and 47 in Singapore, data from IHS shows.

Even Korean yards that usually build drillships won 3 jackup rig orders in 2013, after exiting that segment decades ago.

Keppel isn't alone in chasing the rising interest in deepwater rigs.


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