Keppel FELS Adds US$300 Million in New Contracts
Keppel FELS Ltd, a wholly-owned subsidiary of Keppel Offshore & Marine, has secured three contracts worth a combined US$300 million from repeat customers. The contracts are for the construction of a KFELS B Class jackup rig from Star Drilling Pte Ltd, a Singapore-based company promoted by the companies of D.P. Jindal Group; the upgrading of the semisubmersible ENSCO 5006 for Ensco PLC (ESV) (Ensco); and the upgrading of the semisubmersible Ocean Patriot for Diamond Offshore (DO1.F).
Wong Kok Seng, Managing Director (Offshore) of Keppel O&M and Managing Director of Keppel FELS said, "We are glad to be able to continue from 2012 into 2013 by adding more contracts to our orderbook. Even as we add to our new orders, we continue to deliver our projects safely, on time and on budget. Just over the last two months, we delivered four newbuild rigs by up to a month ahead of schedule.
"We are honored to have returning customers come to us for newbuilds as well as repairs and upgrades. With Jindal, this will be their third KFELS B Class jackup rig. We have to-date delivered ten such rigs to Indian customers and look forward to supporting Jindal and their growth in India's oil and gas market. At the same time, we also have a healthy load of repair and upgrade work and we are grateful that customers like Ensco and Diamond have regularly sent their rigs to us for repairs, upgrades and modifications."
For the contract with Jindal, the jackup rig will be built to Keppel's proprietary design and customized to meet the owner's operational needs in water depths of up to 350 feet for deployment in offshore India. The rig will have a drilling depth capability of 30,000 feet. Delivery of the rig is scheduled for 4Q 2014.
Raghav Jindal, Managing Director of Jindal, said, "India is enlarging its sphere in the global oil and gas industry and pushing to reduce its dependence on oil imports. These factors present tremendous opportunities for exploration and production activities and Jindal is well positioned with high specification rigs to meet this demand. In particular, this new rig order signals our intention to enhance our presence in the sector. The KFELS B Class is a proven design for us as both DISCOVERY I and VIRTUE I jackup rigs have been operating successfully without any downtime in offshore India. We are pleased to be able to work with Keppel FELS again as we can be assured of receiving a high quality rig on time and to our highest satisfaction."
The D.P. Jindal Group of companies has business interests in the oil and gas sector and provides offshore drilling services as well as manufacturing of seamless & ERW pipes.
For the contract with Ensco, Keppel FELS' major workscope on the ENSCO 5006 includes upgrading of the living quarters, and other contract-specific upgrades for operating in Australia on the INPEX (I8U.F) Ichthys Project.
The vessel is expected to arrive at the yard in 1Q 2014 with redelivery in 2Q 2014, after which it will be chartered to INPEX for work in Australia.
For the contract with Diamond Offshore on the Ocean Patriot, Keppel FELS will undertake the fabrication and installation of four 24-foot diameter stability columns and new lower hull inboard pontoon sponsons as well as upgrade the living quarters.
Work on Ocean Patriot is expected to commence in June 2013 with redelivery at end 2013. When completed, the semisubmersible will be chartered to Shell for work at the Fram field in the UK North Sea.
The above contracts are not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation Limited (KPELF) for the current financial year.