Skip to Content

Yangzijiang wins first rig order. Competition for Sembcorp Marine and Keppel heats up

Yangzijiang Shipbuilding (Holdings) said 78%-owned Jiangsu Yangzijiang Offshore Engineering Co. has clinched its debut offshore oil and gas order.

JYOEC has entered into a construction contract with Explorer I Limited, which is wholly-owned by Mena Offshore Investments and managed by Offshore Logistics (Asia Pacific) (OLAP), to construct and deliver one unit of Letourneau Super 116E Class design self-elevating Mobile Offshore Jackup Drilling Rig worth US$170 million ($207 million).

This contract includes an option to construct one additional identical unit.

There are still many permutations to this. Project Delivery to me is a competitive advantage especially for a complex project like this.

People may pay a premium for complex design and good project management.

But at times, cost becomes a factor. I say the turning point for KepCorp and  Semb Marine is when these China and Korean ship builders develop the expertise in these two areas. Then the margins will start to shrink.


This site uses Akismet to reduce spam. Learn how your comment data is processed.


Wednesday 5th of December 2012

Drillships margin are getting squeezed due to competition and slower global growth

Keppel corp margins are highly reliant on oil prices and demand for oil rigs

Wheres SembMarine has a huge potential growth and higher margins from drillship, therefore SembMarine share price seems to be a higher valuation than Keppel Corp


Tuesday 4th of December 2012

Since bp case, Keppel and sembcorp marine have more orders on shallow water jackups than deepwater semi or drillships.

Only recently, deepwater starts to show signs of life.

Correct me if I am wrong.


Tuesday 4th of December 2012

hi f, i have not followed this so tight. uncle CW may track this much better than me.

Yeo Shan Rui

Tuesday 4th of December 2012

I think it is inevitable that the Chinese will move up the techonological ladder one day. In the shipbuilding industry, the Europeans which have been displaced by the Koreans and the Chinese are stuck with building cruise liner of which they still have some form of technological superiority.

Similarly, Keppel and Sembcorp are moving up to build drillship which the Chinese seemed to be far away from at the moment. However, it seemed to be a matter of time before the Chinese catches up (perhaps 10 years?). In any case, deepwater holds much more risk given that they are more sensitive to oil prices since deepwater has higher breakeven cost. Then again, it seemed hard for them to compete in field of lower technological competence given that they obviously do not have the cost advantage to fight.


Tuesday 4th of December 2012

the complexity and technology required for deep sea drilling can't be stolen or copied overnight, hence what you are paying for. another permutation is whether there is any way that there would be demand tapering off, but they built up a big order book.


Monday 3rd of December 2012

Do Kep Corp or Semb Marine compete in shallow water rigs?


Tuesday 4th of December 2012


This site uses Akismet to reduce spam. Learn how your comment data is processed.