Sembcorp, Keppel Could End 2012 with Over $16B Worth of Rig Orders

Sembcorp, Keppel Could End 2012 with Over $16B Worth of Rig Orders

Sembcorp Marine and Keppel Corporation – the world's two largest drilling-rig builders – are on track to end this fiscal year with over $8 billion (SGD 10 billion) worth of orders each.

Both of the companies build high-specification rigs designed for deepwater and ultra-deepwater exploration.

At present, Sembcorp Marine has already surpassed its record-high of $4.6 billion (SGD 5.7 billion) worth of orders from fiscal year 2008, securing $6.5 billion (SGD 8.1 billion) in offshore contracts, Maybank Kim Eng Analyst Yeak Chee Keong told Rigzone on Wednesday.

Keppel Corporation is also blazing towards its $8 billion (SGD 10 billion) record in 2011 with $7.1 billion (SGD 8.9 billion) worth of rig orders to-date, Yeak said.

Yeak believes that both of the companies will be able to end off the 2012 fiscal year with $8.8 billion (SGD 11 billion) worth of rig orders. 

The drillships and semisubmersibles built by Sembcorp Marine and Keppel Corporation are sought after globally as the two companies possess the technology required to build rigs capable of operating in deep water depths more than 4.921 feet (1,500 meters) and in ultra-deepwater depths of nearly 7,546 feet (2,300 meters).

At the moment, Brazil is the largest customer of the two Singapore yards.

Keppel Corporation's biggest win came on August 7, 2012, when the company firmed up contracts with Sete Brasil for the design and construction of five semisubmersible drilling rigs for approximately $4.1 billion (SGD 5.1 billion). This is in addition to the contract, signed last December, in which Keppel O&M – a wholly-owned subsidiary of Keppel Corporation – agreed to deliver one semisubmersible drilling rig to Sete Brasil. 

The semisubmersible drilling rigs will be built based on Keppel Corporation's proprietary DSS 38E design that is rated to drill 32,808 feet (10,000 meters) below the rotary table in 9,843 feet (3,000 meters) water depth. The six semisubmersible drilling rigs are scheduled for delivery between the end of 2015 and 3Q 2019. When completed, the rigs will be chartered to Petrobras for 15 years for drilling activities in the pre-salt areas of Southeast Coast of Brazil, offshore Brazil. Three of the rigs will be operated by Queiroz Galvão Óleo e Gás SA, two by Petroserv SA and one by Odebrecht Óleo e Gás SA.

Sembcorp Marine's largest score this year also came from Sete Brasil. The company, on August 8, 2012, secured contracts for five drillships worth approximately $4 billion from Sete Brasil. This is in addition to the $793 million contract signed by Sembcorp Marine on February 6, 2012, in which the company agreed to design and construct a drillship for Netherlands-based Guarapari Drilling, a subsidiary of Sete Brasil.

All of the six drillships will be built based on the Jurong Espadon design, which is rated to operate in water of depths up to 10,000 feet and can reach drilling depths of up to 40,000 feet. The drillships are scheduled for delivery between 2Q 2015 and 2Q 2019. They will be built in Brazil and be chartered to Brazilian state-led oil firm Petrobras for 15 years for drilling activities in the pre-salt areas of Southeast Coast of Brazil, offshore Brazil. Three of the drillships will be operated by Odfjell and the other three by Seadrill.

"A tight rig market with rising utilization rates and an aging rig profile will continue to support the rig-building business," Yeak said.

Maybank Kim Eng's published research report on July 20, 2012, stated that Keppel Corporation was "reluctant to give the clear guidance on its near-term margins for 2H 2012, but it would rather let the market have a pleasant surprise."



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