26 Nov 2012

Keppel O&M Marks 10 Years of Excellence with Strong Orderbook of S$12 billion

Keppel Offshore & Marine Ltd (Keppel O&M), a wholly-owned subsidiary of Keppel Corporation Limited, celebrated its 10th Anniversary in 2012 with a strong net orderbook of S$12.2 billion, including S$9 billion worth of new contracts secured year-to-date.

Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister for Finance of Singapore, was the Guest-of-Honour at the Anniversary event held at Gardens by the Bay, to commemorate Keppel O&M's achievements over the last 10 years.

Keppel O&M was formed in 2002 by integrating three established offshore and marine companies, Keppel FELS, Keppel Shipyard and Keppel Singmarine, which have a combined heritage of over 300 years.

Strong Results
Since 2002, the collective strength of Keppel O&M has delivered strong results. Revenue¹ grew three-fold from S$1.9 billion in 2002 to over S$5.7 billion in 2011. For the first nine months of 2012, Keppel O&M has achieved over S$6.2 billion in revenue. Economic Value Added also reached S$992 million in 2011, from S$20.2 million in 2002. These achievements were generated by a global workforce of over 30,000, a significant increase from around 14,000 in 2002.

Mr Choo Chiau Beng, Chief Executive Officer of Keppel Corporation and Chairman of Keppel O&M said, "The past 10 years have proven that this integration strategy is right for us. By eliminating duplication and internal competition, streamlining our operations as well as harnessing synergies and combined strengths, we have maximised value for not only ourselves, but also our customers and business partners. In the process, we have grown from strength to strength."

Robust Track Record
Mr Tong Chong Heong, Chief Executive Officer of Keppel O&M, said, "Our robust track record over the past decade reflects our strong capabilities. Today, our network of 20 yards globally supports our Near Market Near Customer strategy, and enables us to meet increasing demand for local content. For example, in the Gulf of Mexico, our yard in Brownville, Texas, is working on several projects for Mexican customers, while in Kazakhstan, we are building the country's first jackup rig. Over in Brazil, we are constructing six DSS^TM38E semisubmersible (semi) drilling rigs for Sete Brasil, as well as undertaking the fabrication and integration works for four Floating Production Storage and Offloading (FPSO) units."

Other current projects of BrasFELS, Keppel O&M's yard in Angra dos Reis, Brazil, include the P-61 Tension Leg Wellhead Platform (TLWP) for the Papa-Terra field in Brazil's Campos Basin, and the upgrading of a drillship for Noble Corporation. The yard recently garnered bonuses totalling US$2 million for delivering FPSO Cidade de Sao Paulo safely, early and to high customer satisfaction.

Reflecting the market's strong acceptance of its solutions, Keppel O&M has built 50% of the jackup rigs and one-third of the semisubmersible rigs to enter the global market since 2000. In 2013, Keppel FELS expects to deliver a new record of some 20 rigs, exceeding its previous record of 13 rigs in 2009.

In the marine business, Keppel Shipyard has so far delivered 105 offshore conversion and upgrading projects, while Keppel Singmarine has to-date completed some 400 specialised newbuild ships including offshore support vessels and specialised units.

Mr Tong added, "Our proprietary designs are gaining wide market acceptance. Since 2002, Keppel O&M has delivered 35 KFELS B Class jackups, 3 KFELS N Class jackups and 16 semis built to our proprietary designs. Since 4Q2010, Keppel O&M has secured a total of 39 newbuild rig orders, and out of these, 34 are for Keppel designed jackups and semis. We will continue to leverage our execution and design capabilities built up over the years to sustain our market leadership."

Sustaining Technology Leadership
With the recently established Technology Division, Keppel O&M aims to further strengthen its technological expertise, as well as improve on its operational processes to remain competitive in the industry.

Keppel Offshore & Marine Technology Centre (KOMtech), the Group's main R&D unit with over 60 research engineers, has filed more than 23 patents since inception in 2007. The Centre is in the process of extending its research overseas, and has established KOMtech (Europe) in 2010. It will be setting up KOMtech (Brazil) to tap resources and expertise from CENPES, the R&D Centre of Petrobras, as well as from universities in Brazil.

To meet the rising demand for more complex engineering solutions due to offshore oil and gas developments moving into deeper waters and harsher environments, KOMtech and Keppel O&M's Deepwater Technology Group are developing new designs for the industry. These include the DSS^TM51E semi suited for the severe environment of the Gulf of Mexico, and the DSS^TM60HE semi for the North Sea region. Other designs under development include the Extendable Semisubmersible, Deep Draft Semisubmersible, Tension Leg Platform TLP2200 and Slim Drillship.

KOMtech, in partnership with ConocoPhillips, is also designing a first-of-its-kind, ice-worthy jackup rig for one of the harshest marine frontiers, the Arctic Seas. The rig will be capable of operating in a self-sustaining basis for 14 days and is equipped with a hull designed for towing in ice.

"Looking ahead, we will continue to adopt strategies which strengthen and deepen our core competencies, to stay ahead in the market. In meeting the growing energy demand, the drive to develop fields in deeper waters and harsher environments will present extreme challenges. However, I am confident that through good teamwork by our people with our customers and service providers, and our innovativeness and Can-Do! spirit, we will be able to provide the required solutions for the global energy industry," commented Mr Choo.

^{1 Please refer to Annex for 10-Year Revenue Growth Chart}

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About Keppel Offshore & Marine
Keppel Offshore & Marine (Keppel O&M) is a global leader in offshore rig design, construction and repair, ship repair and conversion, and specialised shipbuilding. Its near market, near customer strategy is bolstered by a global network of 20 yards in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Integrating the experience and expertise of its yards worldwide, Keppel O&M aims to be the provider of choice and partner for solutions for the offshore and marine industry. For more information, please visit www.keppelom.com.

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ANNEX
Keppel Offshore & Marine's 10-Year Growth in Revenue
(S $ Million)