While the market eagerly awaits the outcome of the Petrobras 28-rig tender results (expected to be out in 1-2 weeks), the oil spill disaster in the Gulf of Mexico and the imposition of a 6-month moratorium on drilling in deep waters by the US govt has given rise to concerns of a delay in the resumption of rig orders, coupled with sizeable newbuilds due for delivery this year, may lead to a surplus of idle rigs.
In the near term, share prices of KepCorp and SembMarine will be supported by high hopes that both yards will clinch some rig orders from the massive Petrobras deal and should see a sharp short term spike if these contracts materialize. However, this seems to be the only major global rig order this year and with a thinning orderbook in 2011, this leaves little room for a valuation re-rating.
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