Viking Offshore and Marine to focus on mainstream rigs and vessels business

Singapore-listed Viking Offshore and Marine on Wednesday said that it will be moving into the mainstream oil and gas business, as it seeks to expand from being a support services provider.

Viking, listed on the Singapore Exchange Catalist board, issued a statement and held a briefing to unveil its new strategy, which has been some time coming. The firm had said in November that it will partner Singapore rig-building veteran Chan Kwan Bian to construct a US$180 million (S$230 million) jack-up rig.

"The directors believe that the financial performance of the group will be better in the coming years with the improved order books from existing businesses and contributions from the new business areas," said the company statement.

The company's other businesses in the sector include units in ventilation and air-conditioning, winches and power packs, and fire and gas systems. It had bought these in 2009 and 2010 and believes these will complement the new business in mainstream rigs, offshore platforms and vessels.

Basically this involves buying or building these assets and chartering them out.

Industry watchers say that a jack-up rig similar to the one Viking is building can command around US$200,000 a day in today's charter market.

Viking's statement said its directors are "confident that the offshore and marine asset chartering business will contribute significantly to the future financial performance of the group".

The company wants to buy more platforms, rigs and vessels with pre-existing charters to build up its fleet. This will allow it to "develop sizeable recurring charter revenue and (an) economically meaningful portfolio".

Viking also said that last year it completed selling practically all of its non-offshore businesses, in areas such as retail and distribution.