Keppel: Rig market has ‘picked up significantly’

Oil drilling rigs at Cromarty Firth in the U.K. Photo by Ben Wicks on UnsplashOil drilling rigs at Cromarty Firth in the U.K. Photo by Ben Wicks on Unsplash

Keppel Corp. has seen the rig market pick up “quite significantly,” with the volume of enquiries rising, Chris Ong, CEO of Keppel Offshore & Marine, said in a media briefing on the company’s results.

“We are quite confident that there will be parties that we can sit down with and talk to about either putting the rigs to use under a bareboat charter or an outright sale. Whether we will be expecting a transaction soon, we are optimistic,” Ong said.

The comments are from a transcript of the media and analyst call filed to SGX Friday.

Ong said the increased interest is from both potential buyers and from those losing for bareboat charters. He said Keppel’s preference is to sell the rigs, but the company is open to charters because it would put the asset to work. He noted Keppel is speaking with existing clients.

Ong said the rigs are a mixture, with four B-class rigs, as well as contracts with Borr and Grupo R, a CAN-DO drillship and the Awilco rigs.

Loh Chin Hua, CEO of Keppel Corp., added that utilization rates are improving quickly, and charter rates are slowly improving.

“Under the current situation, we believe that things are getting a lot better. That is why we are quite confident of being able to monetise the rigs over three to five years. Realistically, bareboat charter is probably very likely now. We may have a couple of opportunistic transactions in terms of sales,” Loh said, according to the transcript.