SHARES of Singapore's Keppel Corp, the world's largest oil rigbuilder, tumbled as much as 14 per cent on Friday after the firm warned on Thursday three customers may cancel orders worth $1.2 billion.

By 0105 GMT (9.05am Singapore time), Keppel traded 8.1 per cent lower at $4.41, while smaller rival Sembcorp Marine (SembMarine) dropped 4.0 per cent to $1.70 in a broader market down 1.1 per cent.

'The latest headwind could be a major setback for investors attracted to the (offshore and marine) sector's relatively defensive earnings, previously backed by a perceived secured order backlog,' Goldman Sachs said in a report.

Keppel and SembMarine have benefitted from a jump in oil exploration in recent years, but crude futures prices have slid by almost $100 a barrel since hitting a peak above $147 in July, as the credit crunch and recession fears dent demand. -- REUTERS