Why a comeback is still not guaranteed for Singapore’s O&M playing field

SINGAPORE (Dec 19): While oil market prospects may be improving after OPEC’s move to initiate production cuts, DBS Vickers Securities is taking a “neutral” stance on Singapore’s offshore and marine (O&M)/China yards.

In the research house’s Singapore Strategy 2017 Outlook report, analyst Ho Pei Hwa explains that an improving oil market may “motivate” rig owners to take delivery of existing orders, but is nonetheless unlikely to stimulate a big wave of newbuild orders as the oversupply of rigs could take a few years to clear.

“Looking into 2017, outlook for newbuild orders remains lacklustre, though newbuild prices should stabilise at current low levels,” observes Ho.  

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