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Keppel O&M reorganizes, sets delivery dates

Written by  Thursday, 20 July 2017 11:28
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Singapore's Keppel Corp. has revealed that its wholly-owned subsidiary Keppel Offshore and Marine’s (Keppel O&M) has reorganized into two divisions, and has released its plans to deliver five rigs to Borr Drilling in addition to the world's first floating liquefied natural gas (FLNG) vessel conversion.

Image from Keppel.

Keppel O&M reorganized its operations into two divisions, to be able to “streamline and effectively capture new opportunities.”

The offshore and marine sector now has a newbuild division that covers offshore, as well as gas and specialized vessels; and a conversions and repairs division.

Keppel said it was able to achieve an operating profit of about US$26 million (SGD $36 million) due to rightsizing efforts by Keppel O&M.

“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,” Loh Chin Hua, Keppel Corp. CEO said in the company’s Q2 2017 report. “Our rightsizing will enable us to weather through a prolonged downturn. 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. We will also explore opportunities to re-purpose our offshore technology for other uses.”

As for its scheduled deliveries, Keppel has several on the books to deliver out until 2020.

“We have closed the deal for the novation of the five Transocean rigs to Borr Drilling and received the down payment of US$275 million,” Hua said.

The first two jackups will be delivered in 2018; the third in 2019; and the remaining two rigs will be delivered in 2020. 

Last month, Keppel and Borr agreed on the construction contracts of the rigs, following Transocean’s jackup fleet sale to Borr.

Keppel confirmed that the company, along with partner Golar LNG, is on track to deliver the world's first FLNG vessel (FLNGV) conversion, the Hilli Episeyo, within three years.

“The converted FLNG vessel will be a game changer in the LNG industry, providing a solution that is not only significantly more cost effective but also much faster to market,” Hua said. 

Earlier this month, a naming ceremony was held for the Hilli Episeyo, which was converted from a 1975 built Moss LNG carrier with a storage capacity of 125,000 cu m.Upon its completion, the FLNGV will be put in operation offshore Kribi, Cameroon for Société Nationale des Hydrocarbures and Perenco Cameroon, and will be the first FLNGV project in Africa.

In the first six months of 2017, Keppel O&M delivered three major projects – a floating production and storage offloading (FPSO) unit conversion for Yinson Production, a FPSO integration for BW Offshore, and a semisubmersible for SOCAR (State Oil Company of Azerbaijan Republic). 

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