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Keppel remains confident despite fall in oil price

Keppel remains confident despite fall in oil price
Despite the recent fall in the oil price Keppel Corp remains confident about the outlook for its offshore and marine business, and continues to push into new areas such as FLNG conversions.

Keppel Offshore & Marine (Keppel O&M) has booked SGD3.7bn ($2.9bn) in new orders so far this year and its orderbook as 30 September stood at SGD12.7bn with deliveries through 2019.

Keppel O&M remained the largest contributor to group profits with an SGD359m pre-tax profit in the third quarter, up 27% year-on-year, and accounting for 42% of the SGD642m group total.

"E&P investments have to increase to keep up with global oil demand set to rise by 1.1m barrels per day in 2015," the company stated in its earnings call, adding that at the current price of $85 per barrel for oil most fields were economic to operate.

Although the value of new orders slowed in the third quarter of the year the company said it continued receive "robust inquiries".

Keppel O&M has continued to make inroads into what it sees a potential new core business, FLNG conversion. It has signed a Letter of Intent (LOI) with Golar LNG for a second FLNG conversion following its first firm contract in July worth $735m.

Keppel O&M ceo YY Chow said they hoped to convert the LOI into a firm contract by the end of the year.

Looking ahead he said Keppel was looking to have the capacity to carry out two FLNG conversions a year, with a mix of FLNG and FPSO conversions.