Keppel Corp 01 (May 08 - Dec 14)

[winston]

On Bloomberg now.

DnB Sell Call. Target 7.00

[Aspellian]

Keppel could be in better positions to win more contracts from Petrobras vs the other rig-builders as Keppel has shipyard in Brazil.

Bidding round pace may slow down
News wires

The pace of bidding rounds in Brazil's offshore pre-salt fields will depend heavily on local industry's capacity to provide goods and services required by local content rules, state-run Petrobras said today.

Brazil has instated heavy local content rules for production of equipment such as oil platforms to ensure the development of the deep-sea reserves provides jobs and economic growth while fortifying domestic industry.

"The rhythm (of bidding) for those new areas will be heavily determined by the capacity of domestic industry to provide goods and services for the gigantic investment programme," Petrobras boss Jose Sergio Gabrielli said in a conference call. "That is for me the driving force for the rhythm of bids in those areas."

Brazil has promised to create hundreds of thousands of jobs by using Brazilian companies and workers to build key equipment such as floating storage, production and offloading (FPSO) terminals, Reuters reported.

Critics say the effort could slow subsalt development if equipment cannot be provided on time, or could vastly boost the costs of production if the government pressures Petrobras to prioritise employment creation over efficient procurement.

Brazil halted new exploration in the promising deep-sea acreage after the 2007 discovery of the massive Tupi field as the government prepared a proposal -- delivered to Congress this week -- changing the rules for tapping those reserves.

Petrobras, under the new rules, would be the sole operator of the new projects in the pre-salt region with a minimum stake of 30%, while the current concession system would be replaced with production-sharing agreements.


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Wednesday, 02 September, 2009, 20:09 GMT | last updated: Wednesday, 02 September, 2009, 20:09 GMT

[Aspellian]

not vested. source: upstreamonline

Petrobras to set local content rule for drillships

By Fabio Palmigiani

BRAZILIAN oil giant Petrobras plans to impose minimum local content requirements for drilling packages in the first wave of ¿Brazilian-built drillships to be used in the development of the Santos basin pre-salt cluster.

Petrobras was poised this week to launch parallel tenders for up to 28 Brazilian-built ultra-deepwater rigs — including the seven drillships the company will acquire on a purchase basis — and expects to receive bids in four and a half months. “Nowadays, we have to import almost 100% of the drilling packages for our platforms. What we are trying to 
accomplish is to require the local content step by step,” said Petrobras engineering services director Renato Duque.

He said drilling packages on the first two drillships would require a Brazilian content of at least 20%, rising to 40% for the third and fourth units and reaching 50% for the final three rigs.

“At the end of the seventh unit, we will have the conditions set to start requiring a minimum 50% of local content for drilling package equipment,” he said.

Duque said National Oilwell Varco and Aker Solutions — the duopoly that dominate the sector — are battling over a single contract, implying that Petrobras intends to use its bargaining power to push the local content issue further.

Total local content for the Brazilian drillships will vary from 55% for the first two units to 65% for the fifth, sixth and seventh drillships, Duque said.

Petrobras is pushing for local content by defining minimum goals and taking into account the smaller sub-systems on its units.

“It is in the engineering of the main systems, but even more so in the engineering of the sub-
systems that technological 
domain is found. That’s why we are continually pushing for 
higher levels of domestic engin­eering,” Petrobras E&P director Guilherme Estrella said.


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Friday, 16 October, 2009, 02:47 GMT | last updated: Friday, 16 October, 2009, 08:22 GMT

[Aspellian]

Ensco fires up deep-water driller
By Upstream staff

Offshore driller Ensco International reported that the Ensco 8501, the second of seven new ultra-deep-water semi-submersibles in the Ensco 8500 series, has started operations for Nexen and Noble Energy on a three and a half year deal in the Gulf of Mexico.

The US outfit has hit an important milestone with the latest unit starting operations, said chief executive Dan Rabun.

“Ensco already has invested more than half of the $3 billion committed to the Ensco 8500 Series newbuild program, and we are well on our way toward having the world’s largest fleet of ultra-deep-water semi-submersibles capable of drilling in water depths of 7500 feet or deeper.” Rabun added.

“We now have three ultra-deepwater semi-submersibles in our active fleet to complement our premium jack-ups around the globe.”

The 8500 series design includes a 35,000’ nominal rated drilling depth, 2 million pounds of hoisting capacity, 8000 tonnes of variable deck load and an open layout well suited for subsea completion activities.

Ensco 8502 and Ensco 8503 are scheduled for delivery in the first and fourth quarters of 2010, respectively, each with two-year contracts in the Gulf of Mexico.

Ensco 8504 is scheduled for delivery in 2011. Ensco 8505 and Ensco 8506 are scheduled for delivery in 2012. Singapore’s Keppel FELS is the builder of the Ensco 8500 series seven-rig fleet.


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Friday, 16 October, 2009, 02:08 GMT | last updated: Friday, 16 October, 2009, 02:08 GMT

[winston]

Not vested.

KepCorp's Q3 net profit up 17% By VINCE WEE

Keppel Corp on thursday reported net profit for the third quarter to end September 2009 rose 17 per cent to S$319.56 million.

Revenue fell 5.5 per cent to $3.04 billion due to lower revenue reported by the offshore and marine and infrastructure divisions.

For the first nine months, group revenue was 14.2 per cent higher at $9.22 billion. Net profit before exceptional items rose 10.6 per cent to S$922.19 million.

Source: Busines Times

[winston]

KEPPEL CORPORATION - Keppel Corp posted on Thursday a lower-than-expected 17.1 percent rise in third quarter net profit, helped by lower operating costs.

- Deutsche Bank raised on Friday its target price on Keppel Corp to S$11.20 ($8.05) from S$9.40, but the brokerage keep its "Buy" recommendation.

- J.P.Morgan raised its target price on Keppel slightly to S$9.70 from S$9.50 and keep its "overweight" rating on the stock.

Source: Reuters

[millionairemind]

Published October 23, 2009

Keppel Corp's Q3 profit up 17% to $319.6m
Revenue down 5.5% due to lower revenue from O&M and infrastructure

By VINCENT WEE
KEPPEL Corp yesterday posted a 17.1 per cent rise in third-quarter net profit to $319.6 million from $272.9 million a year ago as higher margins from offshore and marine (O&M) and improved gains from property and infrastructure offset flat growth in investments after the divestment of SPC.

Revenue, however, fell 5.5 per cent to $3.04 billion due to lower revenue reported by O&M and infrastructure.

For the first nine months, group revenue was 14.2 per cent higher at $9.22 billion. Net profit before exceptional items rose 10.6 per cent to $922.2 million. After exceptionals, mainly gains from the sale of SPC, net profit rose by 61.2 per cent to $1.34 billion, translating to basic earnings per share of 84.4 cents, up from 52.4 cents.

In Q3, profit after tax and minority interests (Patmi) from the key offshore and marine division, which still provides two thirds of the group's gains, rose 9 per cent to $215 million due to higher margins, although revenue fell 10 per cent to $2.12 billion.

Keppel's net orderbook is slowly shrinking, with the still quiet O&M market providing no significant new contracts in Q3, and has been reduced to $6 billion at the end of the quarter. This is the lowest level since Q1 2005, but will provide the group with a good base load of work, Keppel said.

The division has completed and delivered three semisubmersible rigs, seven jackups and four major conversions/upgrades and has another 17 jobs to complete this year, said chief executive Choo Chiau Beng. There are some signs that activities are picking up with active enquiries and a number of tenders for new rigs, the group noted. In addition, Mr Choo noted that the group has seen no drop in the price of newbuild semis so far.

For the first nine months, O&M revenue rose 16 per cent to $6.5 billion while Patmi increased 26 per cent to $609 million.

In Q3, property Patmi jumped 46 per cent to $54 million. Revenue rose 72 per cent to $362 million. For the first nine months, revenue was 26 per cent higher at $909 million and Patmi rose 15 per cent to $133 million.

This was mainly due to progressive revenue recognition of the Reflections at Keppel Bay and the completion of The Sixth Avenue Residences while profit rose on higher revenue recognition from the sale of residential properties and share of profit of associated companies developing Marina Bay Residences in Singapore and The Botanica in Chengdu, China.

The property market for Singapore and the region continued to gain momentum in Q3 as market sentiment strengthened amid further signs of economic recovery, Keppel said. It saw strong demand for new homes in Singapore and China. Residential property sales had also gradually picked up in Vietnam, India and Indonesia, with more sales seen in these markets in Q3. It will review its option to launch new projects and re-launch existing projects in its pipeline. Singapore office rentals are also expected to bottom out as business confidence returns and the group's significant portfolio of new office buildings in the New Downtown is expected to benefit from the recovery.

Keppel's infrastructure division reported 67 per cent Patmi growth to $25 million in Q3 while revenue fell 14 per cent to $548 million. For the first nine months, infrastructure revenue rose 2 per cent to $1.77 billion while Patmi jumped 98 per cent to $81 million. Higher revenue from Keppel Integrated Engineering's engineering, procurement and construction (EPC) contracts was partially offset by lower sales from Keppel Energy due to lower fuel prices.

Further contributions will come from the acquisition of the Senoko Incineration Plant, which was completed in August, and the Tuas South incineration plant and domestic solid waste project in Qatar when they come online.

[winston]

Not vested. From UOBKH:-

Earnings Revision

We raise our FY09 net profit forecast by 13% to S$1.6b, factoring in higher O&M and Keppel Land’s earnings. However, we scale back our FY10 and FY11 forecasts by 8-10% on lower O&M earnings given the greater-than expected revenue recognition in FY09.

We assume annual contract wins of S$2b in 2009 and S$3b in 2010 and 2011. While oil price has rallied to
S$80/bbl, bank funding for new projects remains the key issue.


Valuation/Recommendation

All hope hinges on Petrobras contracts. Keppel appears to have lost out in its bid to construct eight FPSO hulls for Petrobras. The next major contract tendering will be for seven drillships and two semi-submersible rigs. These are the first batch of the 28 rigs required by Petrobras. The outcome of the contract will only be known in 2010 as Petrobras contracts typically go through a few rounds of tendering before conclusion.

Maintain SELL despite upgrading our target price by 11% to S$7.00.

Our revised sum-of-the-parts (SOTP) valuation has imputed:
a) a higher targetprice of S$3.60 for Keppel Land (previously S$3.20), and
b) a higher 18x PE (previously 15x) longer-term sustainable earnings in the valuation of the O&M segment in view of continued strong oil prices although contract flow remains elusive.

We assume a sustainable O&M contract wins of S$3b annually in the longer term, which translates into an annual O&M net profit of S$250m.

[winston]

KEPPEL CORP - J.P.Morgan said Keppel Corp's target to secure S$2 billion worth of offshore and marine orders in 2010 are below its and consensus estimates and should lead to significant out-performance in the number of new orders.

- CEO of Keppel Offshore and Marine, the world's largest offshore oil rig builder, told Reuters in an interview that it is aiming to secure S$2 billion worth of new orders in 2010, as oil prices return to levels that it sees sustaining exploration projects.

Source: Reuters

[winston]

KEPPEL CORP - Keppel Corp will upgrade and repair two Noble Corp's drillships for $304 million in Brazil, according to a Keppel announcement early on Monday.

Source: Reuters