Monday, September 20, 2010

Offshore & Marine

Offshore & Marine: Cimb keeps Neutral rating on O&M, citing that latest update by ODS-Petrodata suggests that new stringent regulations in the wake of the Deepwater Horizon accident will make drilling in Gulf of Mexico unattractive over the next 2 years. It argues that while Spore yards are capable of building high-spec rigs certified for GOM operations, the more immediate catalyst still rests with Petrobras mega rig award, which have now been postponed till after the Nov presidential elections in Brazil. Given the several rounds of delay, the final award may even be pushed into 2011. The lack of order flow could result in Spore yards trading in tight ranges in the interim although industry sources reveal that Atwood Oceanics has approached SembMarine & Korean yards for quotes for a drillship. SembMarine is currently building 2 deepwater semi-subs for Atwood for delivery in 2011/12.

Cimb is maintaining Neutral call on SembMarine with TP of $4.20 & Outperform for KepCorp with TP of $10.70.

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