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Raffles Yantai wins jack-up rig dealworth US$135m
The global rig building boom continues with Singapore's Keppel Offshore & Marine (KepO&M), the world's largest builder of jack-up rigs, securing a US$371 million contract for the largest jack-up ever to be built here.
Also getting a slice of the action is Raffles Yantai Shipyard (Raffles), whose facilities are in China but is headquartered in Singapore. It has clinched its first jack-up drilling rig order worth US$135 million from Uni-Arab Group Holdings.
A Keppel Group statement said subsidiary KepO&M's wholly owned subsidiary Keppel FELS will deliver the in-house designed rig to ProdJack AS, a member of Norway's Skeie Group, in 2010. Keppel will have a 10 per cent stake in the rig, which can operate in waters up to 400 feet deep and drill to a depth of 35,000 ft.
Said KepO&M's chief executive Choo Chiau Beng: 'Three years ago, when we first cooperated with the Skeie Group, the offshore market was still lacklustre.
'Their market foresight and entrepreneurial spirit in searching for innovative solutions in challenging conditions has encouraged us at that time to develop and design the KFELS Super B Class jack-up rig that can drill in deeper depths at higher temperature and pressure.'
As for Raffles' rig, it will be able to operate in up to 300 ft of water and be able to drill to a depth of 20,000 ft. It can also accommodate up to 110 persons. Construction of the rig at Raffles' yards in Yantai, Shandong, is expected to begin in the first quarter of 2008 for delivery in early 2009.
Raffles said the contract signifies a major breakthrough for the group into jack-up drilling rigs and will boost its order book to US$1.44 billion.
Executive chairman Brian Chang said: 'Working with Uni-Arab Group Holdings is indeed an exciting opportunity for Raffles. Our years of perseverance have helped us to keep improving and penetrating new global markets. We are confident that this will pave the way for future collaborations between both parties.'
Yantai claims it has been successful in securing almost a third of all the semi-submersible drilling rigs signed in recent months, and now has five submersibles, one semi-submersible decommissioning rig and one drilling production semi-submersible under contract.
With crude oil hovering around the US$60 a barrel level, the outlook for the offshore oil & gas sector continues to look buoyant. According to analysts' estimates, rig utilisation is almost at 100 per cent worldwide, requiring more jack-ups for a few more years.
In fact, business is so good that Singapore yards - the world's leaders for jack-ups and conversion of floating, production, storage and offloading vessels with over 70 per cent of the global market in each category - are bulging with orders for delivery right up to 2010. KepO&M has an order book of about $10 billion while rival SembCorp Marine has work worth over $6 billion.
Listed on the Oslo over-the-counter Stock Exchange in Norway in May this year, Raffles specialises in jack-up drilling rigs, semi-submersible drilling rigs, FPSO, and other offshore vessels.
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