Keppel, SembMarine didn't win any new rig building contract in Q4
By VINCENT WEE
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THE last week of the year is bringing in the dregs of new contract announcements from the main shipyards here. And from the look of things, the slowdown in rig orders has well and truly set in, with neither Keppel Corp nor Sembcorp Marine Sembcorp Marine announcing any new rig orders in the fourth quarter.
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Keppel Offshore and Marine (KOM) said yesterday that several of its units have won contracts worth a combined $200 million for a floating production storage and offloading (FPSO) conversion and five tug-building jobs.
As of yesterday, Keppel has secured $5.9 billion of new contracts this year and has a net order book of $11.2 billion. SembMarine has won $5.7 billion of contracts and has a net order book of $10.1 billion.
The most notable figure, however, is one that is glaring by virtue of its absence. Keppel and SembMarine, which together build about 90 per cent of the world's rigs, did not win a single new rig building contract in Q4. Indeed, the most significant news in recent months was Keppel's revelation last month that $1.2 billion of orders from various clients were under review.
Although Q4 is traditionally a slow time for deals, at least some rig contracts were signed in Q4 2007. For example, Keppel won a US$780 million order for four jack-up rigs and a massive US$1.2 billion order from Brazil's Petrobras for a floating production unit (FPU).
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SembMarine was preoccupied with internal problems related to unauthorised foreign exchange transactions during much of Q4 2007 and saw few new orders.
In contrast, contracts secured in Q4 this year have been entirely for conversion and shipbuilding. Keppel's order flow seems to be still pretty good, with $690 million of mainly FPSO conversion and related work announced.
SembMarine announced just one $200 million FPSO conversion in Q4.
Both Keppel and SembMarine seem recently to be increasingly keen to highlight the continuing stream of contracts won by their shipbuilding and repair arms.
'The new orders are a creditable wrap-up for a year in which the second half has been ravaged by very negative financial and economic factors,' said KOM's chief operating officer Tong Chong Heong.
'The fundamentals of the industry remain sound, even though the pipeline of projects has slowed down,' he said. 'There are still projects in the market, but we will only take on those that are cashflow positive.'
SembMarine, when announcing an evergreen favoured customer contract (FCC) with International Gas Transportation Co to provide repair and life extension works, said: 'This is a significant achievement for SembMarine, as it is the first evergreen FCC contract signed between a renowned LNG ship operator and a Singapore shipyard group.
'As part of the group's strategy to become the world leader in the repair and life extension of LNG carriers, we have achieved an important step in getting into the big league of specialised LNG carriers refit and life extension work.'
Keppel shares closed six cents higher at $4.26 yesterday. SembMarine shares closed three cents up at $1.69.
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