Tuesday, December 18, 2012
Keppel Corp: talks about its China strategy during an interview with Bloomberg. Keppel says it may consider buying a yard in China as the nation boosts offshore drilling to meet rising energy demand. Keppel, which already has one yard in China making parts for oil rigs, says it will seek out acquisitions if the government opens offshore projects by state-owned enterprises to foreign companies. Keppel is targeting emerging markets including China, West Africa and Mexico, as oil producers expand in new areas to offset waning reserves. Keppel, which operates yards in its home city as well as in the U.S., Qatar, Brazil and Indonesia, is seeking to move closer to its customers with new locations. The possible expansion in China comes as the govt encourages local shipyards to move into the offshore business. The country is targeting 20% of the global market for rigs, production facilities and other offshore products by 2015. Meanwhile, Chinese shipyards Yangzijiang and Jinhai Heavy Industry both announced their first offshore orders this month, helped by lower prices. Yangzijiang’s US$170 m order for jack-up rig announced on Dec. 3 was lower than a similar order Keppel secured in Apr for US$205m. Keppel notes lower prices are squeezing the profit margins of existing yards, including those operated by Keppel. Says it must find new ways to compete, new battlefields that it can win, but it can choose its battlefield. According to Bloomberg, Keppel has won $9b worth of new orders this year through Nov. 26, helping increase its order book to $12.2 b. The co expects to deliver a record 21 rigs next year, exceeding its previous high of 14 in 2009. The rig-maker has climbed 17% this year, vs the 19% advances for the STI and its biggest rival, SMM.