financial and operations review operations review
Amid the volatile global environment and competitive market conditions, Sembcorp Marine delivered satisfactory results underpinned by its rig building, ship conversion & offshore and ship repair sectors. Turnover for the Group was $4.4 billion with the rig building sector contributing $2.4 billion followed by ship conversion & offshore sector at $1.4 billion, the ship repair sector at $642 million and others at $37 million.
Alliance and FCC partners together with regular clients provide a steady stream of repair projects at Sembawang Shipyard.
452./6%2 #/.42)"54)/.3 "9 3%#4/23 FY2012 FY2011
1% 14% 1% 16%
27% 32% $4.4 $4.0 Billion Billion
53% 56%
Ship Repair Rig Building Ship Conversion/Offshore Others
Capricorn Voyager, a tanker from Chevron Shipping Company, setting off from Jurong Shipyard after completing drydocking repairs.
62 Ship Repair Sector
490%3 /& 6%33%,3 2%0!)2%$50'2!$%$ Ship Repair 2012 2011 2012 2011 Number of vessels 337 264 18% Average value per vessel ($m) 1.90 2.44 10% 31% 15% Turnover ($m) 642 644 7% 4% 4%
7% Repair Revenue Contribution (%) 2012 2011 13% 6%
Alliance/FCC partners 45 42 7% 15% 28% Regulars 37 40 12% 17% Total 82 82 6% Others 18 18 Tanker Containership Bulk Carrier LNG/LPG Carrier Passengership Drillship/FPSO Upgrading Support Vessel Others Grand Total 100 100
Maersk Virtue, a LPG tanker owned by A.P. Moller, being ushered into Taizan , a crude oil tanker owned by Kyoei Tanker Co., all set to go after Legend of the Seas , a cruise ship belonging to Royal Caribbean Cruises, Jurong Shipyard for repairs. completing repair works. receiving drydocking repairs at Sembawang Shipyard.
63 operations review Ship Conversion & Offshore Sector
Ship Conversion & Offshore Sector Deliveries 2012 2011
FPSO/FSRU 3 3 Newbuild 1 - Offshore vessel - 1 Platform - 1 Total 4 5
Successful conversion of Nusantara Regas Satu , Asia’s first Floating Storage and Regasification Unit, by Jurong Shipyard for Golar LNG. Rig Building Sector
Rig Building Sector Deliveries 2012 2011
Jack-up 2 3 Semi-submersible 2 4 Total 4 7 Repair and upgrading of jack-up rig Galveston Key for Transocean at Sembawang Shipyard.
64 Contracts Secured #/.42!#43 3%#52%$ 3- Contracts secured in 2012 was at a record high of 12000 _ $11.0 billion as compared with $3.7 billion in 2011. As at February 2013, $1.2 billion in contracts were clinched 10000 _ 10,979 since the start of the year. 8000 _
Net Order Book 6000 _ The Group’s net order book as at December 2012 was at an all-time high of $12.7 billion as compared with 4000 _ 3,724 $5.1 billion in 2011. Including the new contracts secured 2000 _ to-date as at February 2013, the net order book stood at 1,155 $13.9 billion. 0 _
2011 2012 2013 (February)
Jack-up Semi-submersible/Accommodation Rig/Intervention Rig Conversion & Offshore Offshore Platform Drillship
.%4 /2$%2 "//+
3- 15000 _ 13,883 12,728 12000 _
9000 _
6000 _ 5,096
3000 _
0 _
2011 2012 2013 (February)
Atwood Falcon semi-submersible rig after upgrading by Jurong Shipyard. Jack-up Semi-submersible/ Accommodation Rig/Intervention Rig Ship Conversion/Offshore Platform Drillship
65 operations review Outlook and Underlying "2%.4 #25$% /), 02)#% 53$"", Market Drivers 140 _
The fundamentals in the offshore oil and gas sector 120 _ are expected to remain intact albeit macro-economic uncertainty affecting global markets. Exploration and 100 _ production spending by major and national oil companies 80 _ is forecasted to increase, with oil prices trending above US$100/bbl buoyed by growing world oil demand and 60 _ tight oil supply. 40 _
Growth in Global Oil Demand Continues 20 _
According to International Energy Agency (IEA), world oil 0 _ demand grew at an annual rate of 1.1 per cent in 2012 and is expected to increase another 1.0 per cent in 2013. J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F Oil demand growth continues to vary significantly by 2005 2006 2007 2008 2009 2010 2011 2012 2013 region. For the Asia/Pacific region, oil demand is estimated to grow more than 5 per cent between 2011 and 2013, /2$%23 &/2 02/$5#4)/. &,/!4%23 4/ '2/7 /6%2 4(% .%84 &)6% 9%!23 reflecting the strong economic growth occurring in China and India. Forecast Orders 200 _ Next 5 years 190
160 150 _ Actual Orders Past 5 years 124 114 100 _
50 _
0 _
No. Orders 2008/12 Low Forecast Most Likely High Forecast
Artist impression of an offshore platform topside to be fabricated and integrated by SMOE for Det norske oljeselskap as part of the Ivar Aasen project in the North Sea. No. Orders 2013/17 Source : International Maritime Associates, Inc
66 Oil Prices Remain Strong Despite uncertainty and volatile market conditions, crude 7ORLDWIDE %XPLORATION 0RODUCTION #APITAL 3PENDING 4O 3URPASS "ILLION )N prices continue to remain relatively strong with the Brent oil price averaging US$111/bbl in 2011 and 2012. In the Europe: +6% Canada: +0.6% 2013 Budget: $47,670 first two months of 2013, the Brent oil price averaged Russia: +7% 2013 Budget: $44,696 2012 Budget: $45,012 US$114/bbl. These strong oil prices will spur the oil 2012 Budget: $44,431 2013 Budget: $50,346 2012 Budget: $47,109 companies’ appetite for additional rigs, which augurs well for the offshore exploration and production sector.
Golden Triangle Continues to Drive Deepwater U.S.: +0.7% India, Asia & Australia: +11% Demand 2013 Budget: $139,634 2013 Budget: $103,620 "UDGET 2012 Budget: $93,318 The Golden Triangle – Brazil, the Gulf of Mexico and West Africa – has constituted the majority of the deepwater market and has largely driven worldwide demand in this Latin America: +15% Middle East: +11% sector. In 2013, this trend will continue. New and emerging 2013 Budget: $72,819 2013 Budget: $29,826 basins in Australia, the Mediterranean and East Africa will "UDGET 2012 Budget: $26,936 contribute to majority of non-Golden Triangle growth in
2013 and coming years. Africa: +5% 2013 Budget: $24,639 "UDGET Announced Discoveries in New Countries Supermajors: +9% Continue to Climb 2013 Budget: $102,210 Note: $ in millions "UDGET In the first nine months of 2012, offshore exploration Source : Barclays Research successes were reported in 12 different countries, up from announced discoveries in five countries in 2008. While the Golden Triangle still constitutes the majority of offshore activity, the emergence of new basins will continue as prices. Latin American companies are expected to lead the report favourable underlying market fundamentals in coastal countries endeavour to explore for hydrocarbons. way in 2013 with capital spending in the region forecasted the deepwater drilling sector and strong demand for to increase by 15 per cent. deepwater drilling equipment, a positive leading indicator Growth in Global E&P Spending Continues for future production floater orders. Global exploration and production expenditures are Orders for Production Floaters to Grow over expected to rise for the fourth consecutive year in the Next Five Years 2013, driven by a projected 9.2 per cent increase in the Business conditions in the deepwater drilling sector capital budgets of international markets on the back of provide a barometer for future requirements for floating international and offshore cycles and attractive commodity production systems. Drilling operators continue to
67