Keppel Fels wins $823 million rigbuilding contracts from new customer

Keppel Fels, a unit of Keppel Offshore & Marine (Keppel O&M), announced today that it has won a US$650 million (S$823 million) contract to build three rigs for a new customer, Fecon International Corp.

The rigs, which are slated to be delivered progressively in the second half of 2016, can operate in water depths of 400 feet and drill up to 30,000 feet.

With these new orders, Keppel O&M currently has 27 KFELS B Class rigs on order.

Fecon, which is a new player in the offshore oil and gas industry, aims to target the growing offshore drilling markets of Africa, Middle East, and Southeast Asia.

It has also identified Russia as a strategic market with good growth opportunities.

Keppel said that Fecon is backed by experienced industrial entrepreneur, A.P. Dobrov, adding that the leadership team has extensive connections and knowledge of working in Russia.

Mr Dobrov said: "Building three premium rigs at the same time will enable us to accelerate our presence in this industry and establish ourselves as a serious drilling contractor in the market.

"Being a new player, teaming up with the world's leading rig builder, Keppel FELS, will help fast track our entry into the market."

The new contracts are not expected to have a material impact on Keppel's net tangible assets and earnings per share for its current financial year.

Keppel shares ended 14 cents lower at $10.39 today.

The company announced the securing of the contracts after markets closed.

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