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FYI, this news is from Llyord's list...
Keppel order threat may lead to more cancellationsBy Jamie Dale and Martyn Wingrove - Friday 28 November 2008
 Keppel saw its largest value slump in more than 21 years after it announced it was in talks to cancel $870m of orders.
KEPPEL’s announcement that $870m worth of rig orders are under threat at its Singapore-based yard may set a dangerous precedent for more order cancellations, a leading analyst warned.
The recent dive in oil prices to around $50 per barrel and ongoing tight credit markets has raised concerns that more drilling rig and offshore vessel orders may be cancelled.
And the Keppel announcement last week about ongoing cancellation negotiations with Seadrill, Scorpion and Ezra suBSIdiary Lewek Shipping could be the tip of the iceberg.
“The announcement may set a dangerous precedent for more potential order cancellations,” Goldman Sachs analyst David Ng said today in a report. “It has not only established that oil-services companies are backing out, it is hitting incumbents such as Keppel.”
Many companies with jack-up and semi-submersible rigs, and drillships on order are fighting to secure finance for these systems, especially when no drilling contracts are lined up.
Rig contractors that are in financial trouble have limited alternatives that include cancelling orders or negotiating delivery delays.
Analysts said there could be more than 20 deepwater drilling rigs and drillships on order from yards in Singapore and South Korea that are under threat from financing constraints and may never be built.
The prospects of cancelling jack-up rig orders are less because most are already under construction for delivery in 2009 or 2010.
“A number of deepwater drilling rig newbuilding orders are likely to be cancelled because of financial difficulties, even though the underlying market is strong,” said Arctic Securities analyst Kjetil Garstad.
“For jack-up rigs the wider market outlook is weaker. The contracted backlog is shorter and the number of jack-up newbuilds to be delivered in 2009 and 2010 without contracts are high.”
“A larger number of jack-up rigs compared to the floater market are used by smaller oil and gas companies that may have financing issues. Seadrill may cancel four jack-up rig newbuildings because of this market view while Scorpion may cancel its semi-submersible rig order for financing reasons,” Mr Garstad told Lloyd’s List.
Seadrill said there are 91 deepwater floaters on order, including 44 drillships and 47 semi-submersibles, plus a further 83 jack-up rigs under construction, including more than 50 due for delivery by the end of 2009.
Fearnleys Fonds analyst Truls Olsen said more rigs are likely to be cancelled because of uncertainty on financing, but it was still not definite that the Keppel orders will be cancelled.
Keppel saw its largest value slump in more than 21 years after it announced it was in talks to cancel $870m of orders.
Its share value had dropped as much as 15%, the most since October 1987, before it closed on Thursday, 13% lower at S$4.20 ($2.78) per share.
Seadrill, Scorpion Offshore and Lewek Shipping were said to be trying to reduce their debt as credit lines tighten, with discussions with Keppel.
Keppel had received downpayments for these orders, but these discussions threatens to cut the company’s S$12.5bn order book.
The analysts cut their rating on Keppel to sell from neutral and slashed their share-price estimate 30% to S$3.40. They also downgraded SembCorp Marine, the world’s second-biggest rig-builder, to sell from neutral. |
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发表于 2008-11-29 22:02
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