Keppel clinches another Ensco contract

Singapore: Announcing another newbuild contract from US rig operator Ensco International, Singapore's Keppel will be on the look-out for additional shipbuilding capacity in Asia. The S$645m deal for an ultra-deepwater semi-submersible, delivering in the second half of 2010, is Keppel's fourth contract with Ensco. But the world's leading rig builder anticipates that Asian construction capacity will outstrip demand when new yards are commissioned and there will be opportunities to buy more capacity relatively cheaply.

Speaking at a Reuters energy conference recently, Keppel's Chief Executive Choo Chiau Beng expressed concern about the capacity build-up and the growing competitive pressure. Choo said that Keppel's 17 yards still had capacity for more orders and pointed to the deepwater rig sector as a target market. High oil prices were a catalyst for exploration, he said, with large areas being earmarked for new oil exploration.  [11/06/07]