Keppel snags $1.07b worth of new orders in early 2014

Thanks to a hefty US$650m deal.

According to Nomura, Keppel has announced securing a US$650mn order from new customer Fecon International Corp. With this new order, Keppel has secured orders worth a combined S$1.07bn in 2014. 

This new order, like the order from UMW Oil and Gas secured on 6-Feb-2014, has been secured at a 5% premium to similar design orders secured in 2013. 

Here's more from Nomura:

Including this order, Keppel have now secured 4 JU orders in 2014 YTD worth a combined US$868mn (~S$1.07bn).

We highlight that Keppel alreadyhas a 6 JU MoU with Pemex that is in the negotiation stage and has 6 outstanding options with Transocean and Ensco.

With sustained high oil prices, we think there is sufficient demand in pockets for Singapore-based rig builders to meet their new order targets in FY14F.

In addition, in our recent discussions with both Keppel and Sembcorp Marine, they highlighted that they expect Mexico to continue to remain a strong region for newbuild JU demand, especially after the government’s decision to liberalise the energy sector.