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HONG
KONG—Keppel Corp. and Sembcorp Marine Ltd., the world’s
two largest oil-rig makers, climbed in Singapore after
Goldman Sachs Group Inc. said rising oil prices would
boost orders and the shares of the companies.
Keppel
gained as much as 1.7 percent to S$11.06 and traded at
S$10.9 as of Monday’s late-morning session in Singapore,
the highest since June 20.
Sembcorp Marine climbed as much as 1.2 percent to S$4.10
and traded at S$4.09, up 1 percent.
Companies such as Exxon Mobil Corp. and Royal Dutch
Shell Plc. plan to spend a record $98.7 billion on
exploration and production this year amid a jump in oil
prices and depleting reserves in shallower waters.
Petroleo Brasileiro SA, Brazil’s state-run oil company
also known as Petrobras, plans to order about $30
billion worth of rigs and platforms after finding the
Tupi field, the largest Western Hemisphere discovery
since 1976.
“We
see Petrobras’ potential oil discovery as a major boost
for the market’s confidence in the sector as this may be
perceived to imply that the upcycle could last for a
very long time,” Goldman analyst David Ng wrote in a
report dated Monday.
“Shares have overcorrected and we see value at current
levels.” He rates Keppel a “buy’’ and Sembcorp Marine a
“neutral.”
The
Tupi field may contain 5 billion to 8 billion barrels of
oil. Petrobras may have also discovered the world’s
third-largest oil field off the coast of Brazil.
Keppel
has an order backlog of about S$14 billion and Sembcorp
Marine about S$8 billion, stretching deliveries to 2012,
Ng said. Record orders have caused shipyards to face
severe equipment and raw-material bottleneck, which is
increasing the waiting period for deliveries to be made,
he said.
Sembcorp Industries Ltd., the biggest shareholder of
Sembcorp Marine, gained 1.9 percent to S$4.28. Goldman
raised the target price for Sembcorp Industries to
S$4.90 from S$4.60 and kept a “neutral” recommendation
on the stock. |
