Singapore Corporate News - 6 Sep 2007

SembMarine unit gets Egypt rig contract

ORDERS are continuing to flow in for SembCorp Marine (SembMarine), the world's second-largest builder of offshore rigs.

Yesterday, it announced that subsidiary PPL Shipyard has been awarded a contract by Egyptian Drilling Company (EDC) to build a rig for US$201 million.

Construction of the Baker Marine Pacific Class 375 (BMC Pacific 375) deep-drilling offshore jack-up rig is expected to begin this quarter, with delivery scheduled in December 2009.

The rig will be built based on PPL Shipyard's proprietary BMC Pacific 375 deep-drilling design and proprietary components, said SembMarine. Equipped to drill high-pressure and high-temperature wells, the rig will have accommodation with full catering and amenities for 120 persons.

Since its launch in 2004, 21 jack-up rigs have been ordered based on this design. Six units have been delivered to the owners with 15 others in various planning, engineering and construction phases with deliveries stretching from 2007 to 2009, added SembCorp Marine.

To date, PPL Shipyard has built and delivered more than 40 rigs of various designs and specifications. SembMarine expects a positive contribution to its earnings from the contract. But it is not expected to have any material impact on the net tangible assets and earnings per share of SembMarine for this year.

SembMarine's order book hit a record $8.6 billion last month with more than half ($4.8 billion) secured in this year alone - way above last year's $3.1 billion orders and even higher than its previous annual record of $4.2 billion achieved in 2005. Last month, it had an order by Offshore Group Corp for a Baker Marine Pacific Class 375 deep-drilling offshore jack-up rig.

The company had earlier reported a 48 per cent rise in second-quarter profits, helped by higher operating margins in rig-building and ship repairs. Net profit increased to $85.1 million while sales were little changed at $1.05 billion in the quarter from $1.04 billion a year earlier.