Keppel, Sembcorp, Sembmarine’s pivot from O&M industry still nascent

This year has been pivotal for Keppel Corp, Sembcorp Industries and Sembcorp Marine (Sembmarine). All three companies, which had benefited immensely from operating in the offshore and marine (O&M) industry for many years, will be doing so less going forward.

Sembmarine, which was a former subsidiary of Sembcorp housing the O&M business, has been cut loose by the latter. In fact, Sembmarine, which has traditionally been involved in rig building and offshore platform fabrication, is expanding its diversification into the gas and renewable energy (RE) industries. And Keppel is currently undergoing a strategic review of its O&M business that could see the latter being sold off.

The reasons for retreating from the O&M industry are obvious. The oil industry has been in the doldrums since the mid-2014 crash in crude oil prices. As prices of black gold remained low, exploration and production projects have been slashed. Inevitably, rig building, offshore equipment fabrication and maintenance contracts, too, have dwindled. As a result, the fortunes of Keppel, Sembcorp and Sembmarine have fared for the worst over the last six years.

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