Definitively Keppel
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DEFINITIVELY KEPPEL REPORT TO STAKEHOLDERS 2011 STAKEHOLDERS REPORT TO OUR VISION IS TO BE THE PROVIDER OF CHOICE AND PARTNER FOR SOLUTIONS IN THE GLOBAL OFFSHORE AND MARINE INDUSTRY. 1 Keppel Offshore & Marine is a global leader in offshore rig design, construction and repair, shiprepair and conversion, and specialised shipbuilding. We harness the synergy of 20 yards worldwide to be near our customers and their markets. CONTENTS 1 Key Figures 2011 64 Sustainability Report 2 Chairman’s Statement Sustaining Growth 8 Interview with CEO and COO 66 – Productivity, Quality and 14 Group Financial Highlights Eco-consciousness 16 Group at a Glance 68 – Business Continuity 18 Board of Directors Empowering Lives 22 Key Personnel 70 – People Development 32 Special Feature – Safety is Nurturing Communities Everyone’s Business 78 – Community Development 38 Operations Review & Outlook 86 Global Network 58 Technology & Innovation 92 Corporate Structure KEY FIGURES 2011 $10b $9.4b NEW ORDERS SECURED NET ORDERBOOK The total value of new contracts secured The balance as at end-2011 in our for 2011 hit a record high. orderbook with deliveries extending to 2015. 41 $160m MAJOR DELIVERIES INVESTMENTS IN PRODUCTIVITY The number of major projects delivered The amount of investments to improve on time and within budget worldwide. facilities and capabilities worldwide during the year. 0.24 74 2 ACCIDENT FREQUENCY RATE TRAINING HOURS The latest accident frequency rate, down The average number of hours each from 0.29 in 2010. employee spent on training during the year. 1. Harnessing the synergy of its businesses and core competencies in the Offshore, Marine and Specialised Shipbuilding divisions, Keppel O&M is the provider of choice and partner for solutions in the industry. 2. Keppel FELS is focused on excellent execution of its current orderbook which extends to 2015. Key Figures 2011 1 CHAIRMAN’S STATEMENT “WITH INCREASING COMPETITION IN THE INDUSTRY, KEPPEL OFFSHORE & MARINE IS FOCUSED ON HARNESSING ITS COLLECTIVE STRENGTH SO THAT IT CAN COMPETE EFFECTIVELY AS ONE STRONG TEAM.” $992m ECONOMIC VALUE ADDED Grew 5% in 2011 compared to 2010. 2011 saw record new orders of 23 jackups, with the majority for Keppel FELS’ proprietary designs. DEAR STAKEHOLDERS, vessels. This surpassed the previous the year. On 3 June 2011, Brazilian While 2011 was an eventful year, the high of $7.4 billion of new orders President Dilma Rousseff witnessed the fundamentals of the offshore and achieved in 2007. As at end-2011, christening of the Floating Production marine industry remained intact. The our net order book stood at $9.4 billion, Unit (FPU) P-56, which is the fi rst global energy sector continued with with deliveries extending to 2015. semisubmersible to be completely built investments despite macro headwinds in Brazil by Keppel. Measuring 125m like the Eurozone debt crisis, economic Financially, Keppel O&M recorded long, 110m wide and 137m high and uncertainties in the US and concerns of a revenues of $5.7 billion with a net profi t with a displacement of 50,000 tonnes, China with a moderated pace of growth. of $1.1 billion, and raised Economic P-56 is the world’s largest FPU. The Value Added by 5% to $992 million. project achieved nine million man hours The resilience of the offshore and marine without lost-time incidents. This industry is due to two key factors. Firstly, RELIABLE EXECUTION accomplishment has further fortifi ed the Macondo incident in the Gulf of In 2011, a total of 41 major projects the position of our BrasFELS yard as the Mexico in April 2010 continues to cast its were successfully delivered, backed leading offshore yard in Latin America. infl uence, sharpening the focus of the oil by enhanced productivity, meticulous and gas industry on safety and quality. project management and the In Singapore, Keppel FELS completed This has caused owners to relook at their commitment of our project teams. a rig which has been chartered by aging fl eets of rigs and vessels. Secondly, Petrobras for six years to support unrest in the Middle East region and Of these, the Offshore Division delivered exploration and production (E&P) natural disasters around the world eight newbuild rigs, comprising three activities in offshore Brazil. Alpha sustained an elevated oil price which jackups, three semisubmersibles, and Star, the second of two DSSTM38 averaged US$95 per barrel for the year. two drilling tenders, together with semisubmersibles, was delivered to As a result, strong interest was ignited one rig completion and one drillship Brazilian company Queiroz Galvão Óleo in new rigs, most notably in the fi rst half upgrade. Our Marine and Specialised e Gás, four months ahead of schedule of 2011. Shipbuilding Divisions converted and and with zero lost time incidents. In upgraded seven FPSO/FSO units and recognition of our execution excellence, At Keppel Offshore & Marine delivered 11 vessels, as well as an QGOG awarded Keppel FELS a bonus (Keppel O&M), we benefi ted from this outfi tting job for a drillship, among other of US$8 million. trend and achieved healthy performance repair jobs. in 2011, with a record $10 billion worth These two deliveries in 2011 added to of contracts secured for 24 jackups, We are particularly proud of some of our track record for Brazil, and we are three semisubmersibles, six the signifi cant projects which were poised to deliver and contribute towards conversion jobs and 17 specialised completed and delivered during Brazil’s aggressive E&P programme. Chairman’s Statement 3 CHAIRMAN’S STATEMENT Apart from Brazil, we also strengthened jumped to 443 man days lost per million our relationships with our key man hours worked, from 139 in 2010. customers in Vietnam and the Middle This was due to an increased number of East. In the last quarter of 2011, fatalities across the Group, including a Keppel FELS delivered Vietnam’s fi rst serious incident which happened at one semisubmersible drilling tender (SSDT) of our shipyards in the Philippines. We ahead of schedule, within budget and are greatly saddened by the loss of lives, with a perfect safety record. This and have gleaned useful lessons so that marks yet another milestone in we can continue to enhance our safety the longstanding partnership which systems and practices. Keppel has had with Vietnam over the last 25 years. Towards this end, we are reinforcing our Keppel Workplace Safety and Health Since its opening in November 2010, 2018 strategy, and through this, we Nakilat-Keppel Offshore & Marine are putting in place a common set of in Qatar has established itself as the safeguards, strengthening accountability region’s premier offshore and marine and promoting safety ownership. The yard, with over 40 repair projects journey to an incident-free workplace completed in its fi rst year of operation. demands strong determination and A milestone project it has undertaken unwavering commitment to stay was the fi rst LNG carrier, Simaisma, focused. We will continue to foster open to drydock in Qatar. The yard also communication, support one another undertook critical repair, modifi cation and share best practices. and upgrading works on Gulf Drilling International (GDI)’s jackup rig, Al-Doha. COMPETITIVE DESIGNS Our record new orders secured in 2011 VIGILANCE IN SAFETY can be attributable to our competitive, With safety fi rmly imbibed as a Keppel innovative and cost-effective solutions core value, we have continued to invest for our customers. During the year, signifi cant resources over the past year we launched a number of enhanced to inculcate a robust safety culture rig designs, including the DSSTM38E across the Group. As Chairman, I am semisubmersible design for Brazilian rallying the leadership team to send out drilling contractor Sete Brasil. a strong message to all our employees An enhancement from the DSSTM38 that safety is everyone’s business, and semisubmersible design, our proven we must stand fi rm in our belief that all fi fth generation deepwater solution, accidents can be prevented. the DSSTM38E is rated to drill to depths of 10,000 metres below the rotary Refl ecting this fi rm commitment, we table in 3,000 metres water depth. invested around $16 million in 2011 With improved capability and operability, on safety infrastructure upgrades, it is suited to the stringent requirements process improvements, training and of the deepwater “Golden Triangle” communication, with the aim of promoting region, comprising Brazil, Africa and safe work behaviour and practices. the Gulf of Mexico. Our efforts in this area were recognised Apart from the DSSTM38E, we also by Singapore’s Workplace Safety introduced the Keppel FELS Super A and Health (WSH) Council and the Class jackup design in 2011. Customers Ministry of Manpower, which accorded welcomed this new design, with fi ve the Keppel O&M Group with 20 awards units ordered by established drilling last year. operators like Ensco and Discovery Offshore. What differentiates this jackup While we are encouraged by the rig from the rest is its versatility. It is accolades, 2011 was a challenging year able to operate in water depths of 400 ft for us. Our accident frequency rate and drill up to 35,000 ft, and is suitable improved from 0.29 reportable cases for various parts of the world like the for every million man hours worked, to UK, Danish and Dutch sectors of the 0.24. However, our accident severity rate North Sea. Keppel Offshore & Marine Ltd 4 Report to Stakeholders 2011 Mr Choo Chiau Beng (centre), CEO of Keppel Corporation and Chairman of Keppel O&M, and senior management during a safety walkabout with consultant company, DuPont. With the growing demand for fl oating offered for bareboat charter or sale accommodation units, we offered a when completed.