Record high oil prices have sent the shares of companies in the offshore and marine sectors rallying up an average of 16.5 percent year-to-date. But analysts spoke to say there is still upside potential, citing factors like strong demand for offshore rigs, which may result in the order books of key beneficiaries like Keppel and SembCorp pushing out to 2012 and beyond. The Singapore stock market may have repeatedly tested new highs in recent weeks, but oil and gas related stocks have done even better, ChannelNews Asia reported. SembCorp Industries, for instance, has outperformed the benchmark Straits Times Index by some 8 percent and Keppel Corp by an even higher 25 percent. Keppel is more exposed to the marine industry, which accounts for about 70 percent of its total earnings. Oil and gas contributes 30 to 35 percent of SembCorp's profits.
But some analysts see more upside largely because of the positive outlook for rigs, and floating production, storage and offloading (FPSO) vessels. And the demand for rigs continues unabated. Both Keppel and SembCorp have orders for 50 jack-up rigs and 15
semi-submersibles cumulatively, stretching their order books till 2009. Analysts say another 100-odd new rigs are needed in the next few years, potentially pushing their order books to 2012 and beyond. (Source: ChannelNews Asia)