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Source: Bloomberg
SINGAPORE does not drill a drop of oil.
Yet from the Caspian Sea to the Persian Gulf and the Gulf of Mexico, the oil rigs its companies manufacture are a familiar sight to prospectors. Companies such as Keppel Corp and crosstown rival SembCorp Industries dominate the industry, producing an estimated nine in 10 of the oil rigs sold around the world.
The largest footprint is perhaps that of Keppel, a group in which Temasek Investments holds a fifth of the shares.
Keppel Offshore & Marine (Keppel O&M), the engineering arm of Singapore's largest conglomerate by market value, has 17 yards around the world, is a leading designer and builder of jackups and offshore rigs and employs staff comprising more than 40 nationalities. It also has an order book of $10 billion that will keep it busy until 2010. That includes two production platforms for Brazil's Petroleo Brasileiro. 'When we started in Brazil, few people there had ever seen a Singaporean,' says Mr Keith Teo, a senior project manager whose overseas stints with Keppel has included postings in the United States, Iran and Azerbaijan.
Engineers such as Mr Teo speak of towns such as Brownsville, Texas, and Baku, Azerbaijan, with an easy familiarity that would do credit to the most seasoned experts who help write the Lonely Planet guidebooks.
Keppel O&M's roots go back to a Chinese Singaporean who worked at Caltex before turning entrepreneur. His first major contracts were to build a steel barge and four steel pontoons for a maritime construction project.
Today, Keppel O&M does its tug building in China and handles some of its offshore work from the Philippines.
Keppel people say most of the yards are equally good at repairing and constructing ships as building offshore oil rigs. A decision in the mid-80s to invest heavily in acquiring design skills is paying off. 'Today, we compete on value addition because we own the rig designs,' says Mr Teo. 'Ours is the workhorse design in the industry and because of that, we can provide the full service - design to manufacture. Not even the Koreans can match us.'
When he goes home to Katherine, his wife of two years, the talk is not always of local property prices or the school they should aim to get their six-month-old into.
That is because Mrs Teo works as a regional business manager at Hewlett-Packard, the company that seeded California's Silicon Valley and midwifed Singapore's own entry into IT manufacturing.
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