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HONG
KONG—Keppel Corp. and Sembcorp Marine Ltd., the world’s
two largest oil-rig makers, climbed in Singapore trading
Friday after they received a combined $850 million of
orders from Seadrill Ltd. of Norway to build four rigs.
Keppel
rose 1.5 percent to S$12.04 at the close of trading on
the Singapore stock exchange. Sembcorp Marine gained 0.9
percent to S$4.53.
Record
oil prices and depleting reserves in shallower waters
are prompting companies such as Exxon Mobil Corp. and
Royal Dutch Shell Plc. to spend a record $98.7 billion
on exploration and production this year, more than
quadruple the sum eight years ago. Petroleo Brasileiro
SA, Brazil’s state-controlled oil company, approved a
plan on May 30 to order 12 drilling rigs, the first of a
40-rig program.
“Countries like
Brazil
have estimated that $240 billion is needed to exploit
their discoveries,” said Anthony Cragg, a portfolio
manager at Wells Capital Management in Denver. “That
means these guys will have to buy rigs and drilling
equipment. The safer way to play it is through related
companies like the rig builders and the offshore marine
services, like Keppel of Singapore. These oil companies
are not going to cancel the orders just because the oil
price goes down.”
A Keppel
unit received an order to build two jack-up rigs, which
have retractable legs that extend to the seafloor, for
$420 million from Seadrill. A Sembcorp Marine unit won a
$430-million contract for another two. The rigs will be
delivered by the fourth quarter of 2010.
The
current jack-up orderbook is less than 20 percent of the
existing aging fleet and the capacity for building new
jack-up rigs at first-class yards is limited, Seadrill’s
chief executive officer Alf Thorkildsen said in a
statement Thursday.
A
shortage of drilling units has pushed rental rates for
rigs to unprecedented levels as oil companies step up
the search for new reserves. (With reporting from New
York. Bloomberg) |
