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Keppel to exit offshore rig building to position for energy transition
Feb 05, 2021

Offshore Energy Today

Singapore’s Keppel Corporation has mentioned that its Keppel Offshore & Marine unit will exit the offshore rig building business as the company realigns for the global energy transition.

The company mentioned that, amidst the global energy transition and major disruptions facing the current oil industry, the company will carry out a comprehensive transformation of its wholly-owned subsidiary, Keppel Offshore & Marine(Keppel O&M), to better align it to Keppel’s Vision 2030.

The overall goal is to create a slimmer, and more competitive Keppel O&M that is well-placed to support the energy transition, even as the company continues to explore inorganic options. Once all existing rigs have been completed, Keppel O&M will exit the offshore rig business.

They will only now focus on higher value-adding work and slowly exit low value-adding works such as repairs.

Due to environmental concerns, there has been a shift to renewable energy and new energy solutions. The increase in technological advancements has also led to increased take up in new energy sources. The focus now is on Natural gas as it is projected to overtake oil as the world’s largest energy source in the coming years.

As part of the transformation, Keppel O&M’s business will be restructured into three parts:

1) Rig Co
2) Development Co (Dev Co), which will be transient entities created to hold its approximately S$2.9 billion worth of completed and uncompleted rig assets.

3)Operating Co (Op Co), comprising the rest of Keppel O&M, which will be transformed into an asset-light and people-light developer and integrator of offshore energy and infrastructure assets.

This restructuring will start with immediate effect and is projected to last over the next two to three years.

With this new focus, Keppel O&M will execute a new rebranding exercise and refine its current vision and purpose.