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