Look no further than Keppel Corp's offshore and marine contracts for the month of May for proof of the upswing in the oil and gas sector. On May 24, Keppel Offshore & Marine (Keppel O&M) announced it had signed contracts for for the bareboat charter of two KFELS B Class rigs to be deployed in the Middle East. The rigs will be chartered to an established drilling company in the Middle East for deployment in 4Q2022 for three years, with options for a year’s extension. Total revenue from the charters, including the options and modification works by Keppel O&M to prepare the rigs for on-site operations, is expected to be up to $120 million. These contracts come on the back of two bareboat charters by Keppel O&M announced on May 9, 2022, of two bareboat charters for $135 million starting 4Q2022, to a Saudi company for five years.
The two rigs to be used for these charters announced on May 24 will be from the terminated newbuild rig contracts with certain customers that Keppel O&M had announced on April 13 2022. On May 6 Keppel O&M announced it was awarded contracts worth around S$250 million from repeat customers for the integration of two Floating Production Storage and Offloading vessels (FPSO).
As part of the definitive agreements Keppel Corporation has signed in connection with the proposed combination of Keppel O&M and Sembcorp Marine, these two rigs and their bareboat charter agreements are part of Keppel O&M’s legacy rigs and will be transferred to AssetCo, that is majority-owned by external investors on legal completion. As at end-1Q2022, Keppel Corp's orderbook stood at $5.1 billion.
