Mar/Apr 2016
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OFFSHOREMARINE A newsletter of Keppel Offshore & Marine March – April 2016 MICA (P) 123/03/2016 SUCCESSFUL PARTNERSHIP ON HIGH-SPECIFICATION VESSEL CONTENTS Double delivery for Keppel FELS 3 Specialised capabilities 6-7 Triple naming for crewboats 8 Innovative repair methodology for 9 Ocean Apex Europe’s preferred ship repair partner 12-13 Exchange of industry insights at OTC Asia 14 Rapport with Nantong 23 Safety excellence 24-26 Community champion in Subic 27 Maritime excitement 30 Centrespread 3 CENTRESPREAD President of Azerbaijan H.E. Ilham Aliyev (in black LeTourneau acquisition completed 18-19 suit) touring the control room of one of the three crewboats on-track for delivery to Azerbaijan Caspian TECHNOLOGY & INNOVATION Shipping Company. Sky’s the limit 20 EDITORIAL BOARD EDITORIAL ADVISOR Chow Yew Yuen EDITOR Lai Ching Chuan ASSISTANT EDITOR Say Huan Yuan COMMITTEE MEMBERS Michael Chia, Wong Kok Seng, Chor How Jat, Abu Bakar Mohd Nor, Dr Foo Kok Seng, Aziz Merchant, Hoo Yao Lin, Hayley Teo, Priscilla Chong, Alan I. Claveria, Betty Mok, Gabriela Soares, Lucienne de Jong, Li Gang, Linda Mercado, Fairuz Aledroos, Roy Tan, Jayne Yeo, Lee Wan Jun OffshoreMarine is a bi-monthly publication of Keppel Offshore & Marine Ltd 50 Gul Road, Singapore 629351 Tel: +65 6863 7200 Fax: +65 6261 7719 / 6265 1927 Company registration no. 199900642R Keppel Offshore & Marine is a subsidiary of Keppel Corporation 2 OffshoreMarine March – April 2016 Double delivery for Keppel FELS Keppel FELS, a wholly owned will be chartered to PEMEX, said, “We are pleased to deliver subsidiary of Keppel Offshore & Mexico’s national oil company, for another two rigs in 2016 to our Marine (Keppel O&M), delivered operations in the Cantarell oil field quality client Grupo R. Despite the two jackup rigs to Mexican in offshore Mexico. They are the current low oil price environment, company, Grupo R, in end first two of five jackup rigs that the market continues to prefer safe March 2016. Keppel FELS is building for and efficient rigs with a proven Grupo R. track record like our KFELS B Class. Built to Keppel’s proprietary We have built strong relationships KFELS B Class design, the rigs, Mr Wong Kok Seng, MD of Keppel with our customers and continue CANTARELL I and CANTARELL II, O&M (Offshore) and Keppel FELS, to engage them in developing win- win solutions.” With the delivery of the rigs to Grupo R, there will be 10 KFELS B Class rigs operating in Mexico, two of which are directly owned by PEMEX. It is the dominant rig design in the region, with those already in operation achieving robust, efficient and economical performance for Mexico. The KFELS B Class jackup is designed to operate in water depths of up to 400 feet and drill to depths of 30,000 feet. Developed by Keppel’s Offshore Technology Development (OTD), the KFELS B Class jackup is equipped with an advanced and fully-automated high capacity rack and pinion jacking system, and Self-Positioning Fixation System. It can provide accommodation with full amenities for 150 people. Keppel has delivered projects to Mexico since 2004 when it was awarded a contract to build two accommodation modules. Besides building new jackup rigs for Mexico, Keppel has also repaired and serviced a total of 18 rigs that Keppel FELS has delivered CANTARELL I and CANTARELL II to Grupo R. Built to Keppel’s have been deployed in Mexico. proprietary KFELS B Class design, the rigs will be chartered to PEMEX for operations in the Cantarell oil field in offshore Mexico OffshoreMarine March – April 2016 3 Running a tight ship On the back of its multi-business strategy, strong financial discipline and prudent rightsizing efforts, Keppel is staying fighting-fit while taking advantage of the downturn to seek new opportunities. Mr Loh Chin Hua, CEO of Keppel Corporation and Chairman of Keppel Offshore & Marine (Keppel O&M), discussed the Group’s financial performance and key developments in the first quarter of the year via a “live” webcast on 18 April 2016. OffshoreMarine produces highlights of his speech. MACRO ENVIRONMENT rigs since end-2015 and we will not vessels in the Port of Singapore. The macro environment remains resume construction until payment This will enable us to capture pull challenging, with slowing growth recommences. through work for LNG-fuelled in emerging economies. China newbuilds, repairs and conversions. continues its shift towards slower BUSINESS UPDATES but more sustainable growth. Keppel O&M continues to focus Apart from sharpening capabilities, OECD has also recently warned of on executing our projects with we are also taking advantage growth easing off in several of the our customers well, and delivering of the downturn to seek new major advanced economies. them safely, on time and on opportunities and expand our budget. services to customers. I am While oil prices have recovered pleased to share that we have from below US$30 per barrel in Just a few weeks ago, we shared obtained the Antitrust approval January, it continues to hover the welcome news that Keppel for our acquisition of the at around US$40 per barrel. FELS Brasil was awarded an FPSO LETOURNEAU™ jackup rig designs, The sustained low oil price module fabrication and integration rig kit business, and aftermarket environment continues to take project by its repeat customer services from Cameron. Expected a toll on the global oil and gas MODEC Offshore Production to be completed in 2Q 2016, the industry, which is in the midst Systems (Singapore) (see backpage acquisition of LETOURNEAU™ of the most severe downturns story). The vessel is expected to will broaden our offerings to in recent years. In the global arrive at the shipyard by the first customers, allowing us to better offshore industry, we are seeing quarter of 2017 for the integration support them with end-to-end layoffs, mergers, as well as large phase. In the past five years, jackup rig solutions. (Editor’s reductions in capital expenditure BrasFELS has delivered five FPSO update: Keppel has since as the industry prepares for a projects safely and ahead of completed the acquisition of longer winter. schedule, of which three were for LETOURNEAU™. See centrespread MODEC. story.) Brazil, which has traditionally been one of Keppel Offshore Pursuing opportunities in the Meanwhile, to ride out the current & Marine’s (Keppel O&M) key non-drilling market, Keppel is turbulence, we will continue markets, continues to be mired in further honing its capabilities in to stay close to our customers, economic and political challenges, the Liquefied Natural Gas (LNG) and focus on execution whilst as well as the Lava Jato corruption business across the value chain. rightsizing the organisation so that scandal. As I announced at the We have jointly secured with the we can remain profitable even start of the year, Keppel has BG Group, now a part of Shell, the with a lower top line. Since the stopped construction on Sete’s licence to supply LNG bunker to start of 2016, our global workforce 4 OffshoreMarine March – April 2016 Keppel O&M continues to keep busy with its backlog of orders as well as repair,upgrade and modification projects has been further reduced by 9.4% rigs that Keppel FELS is building for several conversion projects for or about 2,800 headcount, of Grupo R. floating production and storage which 2,300 are from overseas solutions. yards, while 500 are from those In total, we have delivered three in Singapore. drilling jackups in 1Q 2016, During these challenging times, including one unit to Gulf Drilling we are working closely with our Apart from optimising our International at the start of the customers for win-win outcomes resources across our yards, we year. During the quarter, we have wherever possible. Earlier this are also committed to managing also delivered a liftboat and a year, Transocean and Ensco have our overheads effectively. Transformer platform. announced the deferment of their Keppel Offshore & Marine had projects. Deliveries of two other cut its overheads by 10% last Last month, a naming ceremony jackups, for Clearwater and BOT year compared to 2014. In this was held by Keppel FELS for the Lease Co, have also been deferred first quarter, we have further accommodation semisubmersible to next year, while deliveries of reduced overheads by another (semi) Floatel Triumph which will two semis are deferred from 2017 28% compared to the first quarter be chartered by INPEX Operations to 2019/2020. The contracts are still of 2015, enabling us to achieve a Australia for work in the Ichthys valid, and we are working towards healthy operating margin of 13.6% Field, off Western Australia. This delivering them based on the new despite lower revenue. month, a naming ceremony was schedules agreed upon with our held by Keppel Singmarine for customers. Last month, Keppel FELS delivered a high-specification deepwater two jackup rigs to our customer derrick lay vessel built for Hydro We do not need to make provisions Grupo R, both of which have Marine Services, a subsidiary of for any of these contracts currently. secured charters from PEMEX, McDermott International (see However, we are monitoring the Mexico’s national oil company story on pages 6 and 7). These situation carefully and are focused (see story on page 3). Built to our are among the key projects we on executing our projects well. proprietary KFELS B Class design, expect to complete in 2016, which CANTARELL I and CANTARELL II, include a number of jackups, a are part of a series of five jackup semisubmersible, a land rig and OffshoreMarine March – April 2016 5 Specialised capabilities Keppel Singmarine and McDermott derrick lay vessel to add to their Mr David Dickson, President and International, lnc (McDermott) growing global fleet of specialised CEO of McDermott, added, “We celebrated the naming of a vessels.