Keppel mulls growth opportunities in Brazil

Singapore-based Keppel Offshore & Marine (Keppel O&M) is looking at options to expand its operations in Brazil to benefit from an expanded rig demand in the country over the next few years.

The country’s state-owned oil and gas company Petrobras has indicated plans to tender for the construction of 28 deepwater units in Brazil. Keppel O&M’s CEO Choo Chiau Beng said Petrobras intends to procure the required equipment and contract the rig construction to various shipyards. Keppel O&M’s facility in Brazil may be occupied with the construction of P-51 and P-56 platforms at the present moment. However, the Brazilian operations could possibly take on the construction of drilling units, including semisubmersible rigs, in the future, according to Choo.

The Singapore-based shipbuilder is mulling over possible expansion in Brazil although this will be peppered with caution given the company’s conservative approach towards cash management, according to Choo.

Keppel O&M secured $1.06 billion in new orders during the third quarter ended 30 Sept., bringing its nine-months’ order book for the year to $3.46 billion. During the nine months, Keppel O&M secured 42% of new semisubmersible orders awarded worldwide. The shipbuilder’s outstanding order book stands at $8.66 billion, with deliveries stretching into 2012, including a drillship order from Frontier Drilling and Shell.

The hull of the drillship will be built in China before moving to Singapore for out-fitting. Given that its production facilities are not ideal for the building of the hulls for drillships, Keppel O&M would prefer to remain focused on securing more semisubmersibles and jackup orders, according to Choo.