Sembcorp Marine pops the champagne on $13.9b orderbook

Even deliveries for 2019 are penciled in.

According to Nomura, Sembcorp Marine’s subsidiary PPL Shipyard has been awarded a USD434mn contract to build two jack-ups (JUs) for Integradora de Servicios Petroleros Oro Negro (Oro Negro).

Here's more from Nomura:

The JUs will be based on Pacific Class 400 design and will be capable of operating in water depth of 400 feet and drilling to depth of 30,000 feet. The rigs will also be equipped with latest drilling equipment and offline handling features besides accommodation and amenities for 150 persons.

The rigs are scheduled for delivery in 4Q13 and 1Q14, respectively.

Integradora de Servicios Petroleros Oro Negro, S.A.P.I. de C.V. ("Oro Negro") is a Mexican company that acquires controlling interests in operating companies, strategic standalone assets and assignable contracts in the Oil & Gas services sector to form a diversified and integrated oilfield services company.

At USD217.5mn per vessel, the new rigs are attractively priced, at a 10.1% premium to previous orders based on similar design and a 4.3% premium to order for similar rig secured in May 2012 for Perisai Petroleum.

SMM will likely also benefit from the fact that the rigs are based on its proprietary design Pacific Class 400. Note that PPL yard was previously awarded orders for 6 JUs based on Pacific Class 400 design from various customers.

Repeat orders based on the same design lead to higher margins in our view owing to operational efficiencies and better understanding of rig design and complexity.

Despite recent oil price volatility and macro-economic concerns new orders continue to trickle in and the orderbook remains strong. New orders for the year now stand at SGD10.9bn, while the orderbook is estimated at SGD13.9bn with deliveries extending to 2019.