Keppel unit to buy LeTourneau rig designs

Mainboard-listed Keppel Corp said its subsidiary, Keppel Offshore & Marine (Keppel O&M), is buying Cameron International's LeTourneau rig design and rig kit business for US$100 million (S$141 million) in cash.

The company said the LeTourneau suite of jack-up rig designs have been popular with certain market segments and have a proven track record of operating in a variety of environments. With the acquisition, Keppel will be able to offer the rig designs through the sale of rig kits to shipyards, or deliver ready-to-drill rig solutions from Keppel yards worldwide.

Keppel will also be able to provide more after-market services. With about 100 LeTourneau rigs currently operating around the world, many operators require their rigs to be serviced and repaired.

Keppel said it can leverage its network of yards worldwide to better meet these customers' needs. Besides needing repairs, upgrades and modifications, jack-ups are also required to undergo five-year recertification surveys.

Keppel O&M chief executive Chow Yew Yuen said: "This is an opportune and strategic acquisition as it will not only broaden our suite of jack-up rig design offerings... but also provide us with enhanced capabilities to service customers through the provision of expanded after-market sales and services."

He noted: "With the current low oil price, we have seen a slowdown in new-build rig orders. Rig owners are instead looking at repairing and upgrading their current fleet.

"We believe that we can make the best use of our after-sales service infrastructure to service rigs of both the LeTourneau as well as Keppel Fels designs."

Keppel O&M's wholly owned unit, Keppel Offshore & Marine USA, will fund the purchase with internal working capital.

Keppel Corp shares yesterday ended 20 cents lower at $6.84.

A version of this article appeared in the print edition of The Straits Times on September 01, 2015, with the headline 'Keppel unit to buy LeTourneau rig designs'. Print Edition | Subscribe