Keppel O&M returns to pre-merger blackout

During Keppel Corp’s half-year results presentation, CEO Loh Chin Hua said the outlook for offshore and marine continued to improve as oil prices rose.

Keppel Offshore & Marine (Keppel O&M) was profitable in the first half of 2022 and the operating company, which is to be merged with Sembmarine and us minus the legacy platforms owned by the group following canceled contracts, achieved a net profit of SGD 94 million. ($68.2 million) in the first half.

In the first half of 2022, Keppel O&M recorded SGD 256 million in new orders, bringing its current order book to SGD 4.4 billion. Keppel is confident in further Petrobras contracts in Brazil.

“In Petrobras’ latest tender, Keppel O&M was selected as the only qualified bidder for the P-80 FPSO project. Keppel O&M is currently in advanced discussions for the P-80 contract as well as an option for a second FPSO,” Loh said. If awarded, the two projects would add SGD 8 billion to Keppel O&M’s order book. Loh said the contracts would feature 10% upfront deposits and milestone payments.

Speaking about the first half of the year, Keppel O&M CEO Chris Ong said they had delivered six projects. “We delivered a new dredge, wind turbine installation vessel leg structure, wind turbine installation vessel upgrade, FSRU conversion, dredge jumboization and carrier upgrade from LNG.”

In April, Keppel announced that it had reached a definitive agreement with rival Sembmarine for a merger with Keppel Offshore & Marine and the two companies are currently working through approval processes, including anti-trust filings in several markets. “We are making good progress in terms of anti-trust applications. We believe we are on track to complete the transaction in the fourth quarter,” Loh said.

As for the legacy platforms that aren’t part of the merger, Loh said they’re “making good progress.” He commented: “The short-term shortage of modern rigs has led to an increase in enquiries, as well as utilization rates and daily rates for jackups and benign environment floats.”

In May this year, Keppel announced three to five year bareboat charters for four jack-up rigs totaling SGD255 million. Loh added that they were talking to potential buyers for some of the platforms.

Valerie J. Wallis