Keppel wins $1b oil rig deal

Demand strong on high crude prices

Keppel Corp, Singapore's biggest offshore marine engineering company, will build four jack-up rigs worth a total of $990 million for AP Moller-Maersk, the world's biggest shipping group.

The rigs will be completed at six-month intervals from the fourth quarter of 2007, Keppel said yesterday in a regulatory statement to the Singapore Exchange.

They will be deployed in water up to 350 feet deep and drill high-pressure wells as deep as 30,000 feet into the sea bed.

Record high oil prices last year drove demand for Keppel's offshore and marine unit, which had orders worth $3.4 billion as of Dec 31.

The Maersk order announced yesterday is the largest single jack-up rig order Keppel has received, said Mr Choo Chiau Beng, the chief executive of its offshore and marine unit.

Keppel expects demand for offshore rigs and other marine contracts to remain strong as an aging global rig fleet and high crude oil prices encourage oil firms to upgrade capacity and explore new fields.

Singapore is the world's biggest builder of jack-up rigs, which are mobile offshore drilling units that stand on legs lowered to the seabed. Keppel has built more than 60 per cent of those ordered globally in the past 10 years.

AP Moller-Maersk, the listed unit of Denmark's closely-held AP Moller Group, owns and operates the world's biggest fleet of ships, including container vessels, tankers, car carriers and oil drilling rigs. Its subsidiaries are also engaged in the exploration and production of oil and gas. — Bloomberg