Singapore's Keppel Posts Lower 2Q Profit, Says Rig Market Outlook Muddy
SINGAPORE, July 20 (Reuters) - Singaporean conglomerate Keppel Corp posted a 21 percent drop in its quarterly profit and warned it did not expect a speedy recovery in the offshore and marine market.
The conglomerate and its smaller cross-town rival Sembcorp Marine have been hit by an oversupply of offshore oil drilling rigs, with customers delaying contracts and refraining from placing new orders with oil prices expected to stay lower for longer.
"Despite some pick-up in activity in the offshore market, the general consensus is that, with the prevailing uncertainty in the oil market, and oversupply in the jackup market, a quick recovery is unlikely," said CEO Loh Chin Hua.
Keppel - which got most of its earnings from its property division in the quarter - reported a net profit of S$161 million ($118 million) for the three months ended June, versus S$205 million a year ago.
Revenue from the Offshore and Marine (O&M) division, that builds offshore drilling rigs and support vessels, fell 38 percent to S$449 million due to a drop in work volumes.
Keppel has outlined the liquefied natural gas (LNG) market as a focus area as it tries to boost O&M returns.
The company is betting on expectations that demand will grow for the fossil fuel, which is cleaner than oil or coal and is also versatile, with potential uses ranging from power generation to heating and as a transport fuel.
This year Keppel is on track to deliver the world's first conversion of a ship into a floating liquefaction vessel to Golar LNG and is building small-scale LNG carriers. It has a joint venture with Royal Dutch Shell to supply LNG bunkering operations services in Singapore.
The O&M division recorded a net order book of S$3.4 billion as of June 30. That excludes orders from one of its biggest customers, rig leaser Sete Brasil Participacoes SA, which filed for bankruptcy protection amid a corruption scandal.
"We will continue to build new capabilities, look for new markets in the gas industry and non-oil and gas plays such as Jones Act vessels and dredgers," Loh said.
The Jones Act mandates the use of U.S.-flagged vessels to transport merchandise between U.S. coasts.
"We will also explore opportunities to re-purpose our offshore technology for other uses," Loh added.
Keppel's property division posted a 16 percent rise in quarterly revenue, helped by higher home sales. Keppel sold about 2,470 homes in the first half, up 15 percent from a year ago.
Ang Wee Gee, CEO of its property business, said Singapore's residential real estate market, which has been hit in recent years by cooling measures, was bottoming out and that the company would look at opportunities to increase its land bank in the city-state.
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension