Keppel FELS Limited (Keppel FELS), a wholly-owned subsidiary of Keppel Offshore & Marine (Keppel O&M) has secured a contract from TS Offshore Limited (TS Offshore), to construct an ultra-high specification jackup rig worth about US$500 million.
Scheduled for delivery in 1Q 2017, it will be the first jackup built to Keppel's new proprietary KFELS N Plus design.
With its leg measuring 678 feet or about 68 storeys tall, and a maximum combined drilling load of 3,860 kips, the KFELS N Plus is able to meet stringent operating requirements for the most challenging wells. It can work at a maximum water depth of 500 feet, drill to depths of 35,000 feet, and is equipped with a 100 feet cantilever outreach.
When delivered, it is expected to be deployed in the Eastern China Sea but will also have provisions built in to enable the rig to operate in the North Sea.
Dr Xiong Shaohui, Chairman of TS Offshore, said, "The KFELS N Plus rig is a robust and cost-efficient rig with distinctive safety and operational features. It is one of the world's most advanced rigs of its class with better drilling capabilities, a superior cantilever load performance, a larger deck space, a higher variable load and enhanced accommodations. We are confident it fills the gap for ultra-high specification rigs needed in the Eastern China Sea or almost anywhere in the world with a need for high specification and deepwater jackup rigs.
"We have chosen to build this unit in Singapore to meet specific customer requirements. Keppel FELS was probably the only yard able to provide us with such a high specification rig customised to our needs that would be well received by the market. With their strong delivery track record, we are also assured of receiving a high quality rig on time and in a safe manner, thus minimising any need for supervision during construction. Our strategic partnership with Keppel FELS will enable us to create value on our investments and grow our presence in this industry."
Developed by Offshore Technology Development (OTD), Keppel's R&D arm, the robust KFELS N Plus jackup is an enhancement of Keppel's proprietary KFELS N-Class design, three of which have been successfully operating in the North Sea.
Equipped with 72 high capacity pinion jacks and self-positioning fixation system of OTD's proprietary design, the KFELS N Plus design offers a robust performance during installation as well as elevated survival and drilling conditions.
Mr Wong Kok Seng, Managing Director (Offshore) of Keppel O&M and Managing Director of Keppel FELS said, "We are delighted that TS Offshore has chosen to build their rig for the Eastern China Sea to our ultra-robust and ultra-high specification KFELS N Plus design. This rig is the combination of Keppel's unique experience in designing and building rigs both for the North Sea as well as other parts of the world. It has the versatility to operate efficiently in the deeper waters of the Eastern China Sea as well as areas where the operating foundation conditions pose considerable installation challenges.
"Over the years, we have been able to differentiate ourselves to customers through our ability to understand their requirements and tailor solutions with the perfect fit, in terms of design and quality. Being selected to build a premium jackup rig for China waters is testament to our proven rig designs, reliable project execution and having a competitive total package."
The above contract is not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the current financial year.
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CW8888's estimated order book
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This order in China Water proved that Kep Corp can still win over cheaper Chinese yards. Right?
ReplyDeleteOne more new customer
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ReplyDeleteSINGAPORE: Offshore and marine firm Keppel FELS has secured a S$630-million contract to construct a deep water jack up rig that can operate in depths of up to 500 feet.
It will be one of the first to be able to work at such depths.
The rig, ordered by TS Offshore, is expected to be deployed in the East China Sea with provisions to enable operation in the North Sea, and can drill up to depths of 35,000 feet.
It will also be the first to be built to Keppel's proprietary "KFELS N Plus" design.
It is scheduled for delivery by the first quarter of 2017.
Last week, local offshore and marine player Sembcorp Marine announced it had secured some S$1.36 billion worth of contracts from Transocean to build two drill ships.
- CNA/xq
The latest contract is another indication of the continued strength of Keppel Corp's global offshore oil & gas exploration and production segment. This is particularly so for shallow to mid-water and ultra-deep water exploration, going by the contracts won by Keppel Corp and another Singapore-listed rig builder, Sembcorp Marine, over the past two months.
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ReplyDeleteSINGAPORE: Singapore's rig builders have seen new orders increase since the beginning of the year, taking their combined order books close to S$30 billion with deliveries until 2019.
However, investors appear less sanguine about the outlook, with shares of both Keppel Corp and Sembcorp Marine under-performing the benchmark STI.
Analysts say this reflects caution among investors that rising cost pressures and a tight labour supply could lead to lower profit margins.
Keppel's offshore and marine arm Keppel FELS recently secured a S$630 million contract to construct a deep water jack-up rig that can operate in depths of up 500 feet for TS Offshore.
This is on top of a S$823 million contract in February to build three rigs for a new customer Fecon International Corporation.
Meanwhile, Sembcorp Marine recently announced some S$1.36 billion worth of contracts from Transocean to build two drill ships last week.
Even though Keppel and Sembcorp Marine have garnered new rig orders for 2014, their share prices have not been performing as well.
Analysts say investors are cautious as to whether or not both companies would be able to generate sufficient return for the orders already booked, due to rising cost pressures and increasing competition from China.
Since the start of this year, shares of Keppel Corp have fallen 5.4 per cent, while shares of Sembcorp Marine have fallen by 10 per cent.
This is compared to a 1.2 per cent drop for the benchmark STI.
Some industry watchers say this could be due to concerns that manpower constraints could hurt the bottom lines.
"The margins are coming down for most of the rig markets partly because of some of the policies in place such as the labour policies,” said Ng Kian Teck, lead analyst at Voyage Research.
“These operators have to pay higher levies for hiring foreigners and these trends may sustain. We may see further changes to the foreign levies which may add more negative headwinds to this industry and some investors are pricing in these potential changes. "
But there are others who say Singapore's offshore and marine players should be able hold their ground despite the patchy global economic recovery.
Christopher Wong, senior investment manager at Aberdeen Asset Management, said: "If you look at the rigs, the jack-ups and the semi-subs, Keppel and Sembcorp Marine have achieved a very differentiated niche in terms of the ability to move up the value chain.
“Their designs are proprietary more to that. The replacement cycle continues to be active given the age and fleet of the jack-up and semi-subs so it will go through periods of cyclicality given the nature of oil and gas.”
When reporting its full year earnings recently, Keppel said its offshore and marine division had a net order book of S$14.2 billion with deliveries extending into 2019.
Sembcorp said its marine business had a net order book of S$12.3 billion with completions and deliveries stretching into 2019.
Analysts say they are still expecting dividend yields of between three and four per cent for both Sembcorp Marine and Keppel Corp in 2014.
- CNA/ec
Keppel Corp and Sembcorp Marine shipyards have their hands full these days, with no available rig slots for delivery earlier than 2015 unless clients pay a hefty premium, revealed OSK-DMG regional head of offshore & marine research Jason Saw after his recent two-leg yard visits for both companies.
ReplyDeleteThe research honcho also observed that with the shipyards being so busy for the next two years, they are happy to select contracts with better risk/reward ratios.
He also noted that Brazilian orders are on track to be delivered on time.
- See more at: http://sbr.com.sg/shipping-marine/news/keppel-corp-sembcorp-marine-rig-slots-delivery-filled-till-2014#sthash.nXa2Ya2u.dpuf