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Keppel Corp wades into deep water to battle Korean rivals

Published on Jan 23, 2014 10:32 AM

SINGAPORE (Reuters) - Singapore's Keppel Corp, the world's top offshore drilling rig builder, boasts an US$11 billion order book that will likely lift profits this year as those rigs start to take shape.

There is one order that isn't on the books: the company's first drillship - designed to probe for oil and gas in deep water - which Keppel is building before even landing a customer.

With a likely price tag above US$500 million, it's a big bet that demand is hot enough to warrant the speculative risk, and a challenge to South Korean rivals who dominate this segment.

Keppel's forte is jackup rigs - mobile platforms on extendable legs - which are made for shallower water up to about 500 feet (152 meters). Drillships can operate in water as deep as 12,000 feet.

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