Tendersinfo keep you informed about the latest events in the national and international Procurement Industry. Procurement News provides in-depth coverage of the procurement industry, including contract awards, contract additions, new contract wins, mergers and acquisitions. Tendersinfo through its tender news section provides an update on all domestic and global tendering opportunities, invitation to bid & trade leads.
BRAZIL : SembMarine bags US$792.5m contract in Brazil
Publish Date : 08-Feb-2012
SEMBCORP Marine bagged a US$792.5 million contract from Sete Brasil to build a drillship, setting the stage for more units to come from the Petrobras-backed rig-owner.
Said Wong Weng Sun, president and CEO of SembMarine: \'We believe this order will be the first of many orders in Sete Brasil\'s ambitious drillship expansion programme to develop the giant Brazilian pre-oil fields.\'
Market talk has had it that Brazilian state oil company Petrobras has already approved a 21-rig tender to Sete Brasil. Therefore, deepwater rigs and drillship construction contracts are expected to be awarded in the coming months.
The construction will be based on Jurong Shipyard\'s proprietary \'Jurong Espadon\' drillship design. Mr Wong said the order represents \'the first drillship that our group is building for Brazil\'.
It will also be the first project to be built at the Singaporean rigbuilder\'s new Brazilian yard Estaleiro Jurong Aracruz.
The drillship will be delivered no later than the second quarter of 2015.
Analysts foresee this drillship unit heralds more similar orders to come.
\'We believe this is in addition to the six drillship bids that (SembMarine) submitted in 2011,\' said CIMB analyst Lim Siew Khee.
SembMarine\'s drillship contract value is believed to be about 30 per cent higher than those built by Samsung Heavy Industries, and would address the higher costs of building in Brazil, said Jason Saw of DMG & Partners.
Added Kay Lim, head of securities research at DNB: \'We expect the higher pricing to mitigate the higher construction risks in Brazil and expect the project to be profitable.\'
Sete Brasil\'s approval of SembMarine\'s design is also a \'breakaway\' from the Korean shipbuilders, \'whose designs have dominated market share over the past cycle\', noted Citi analysts.
\'Acceptance of this rig will also improve SembMarine\'s marketability to international drillers and widen its market,\' said Citi.
With more clarity on Petrobras-related drillship orders, CIMB thinks SembMarine\'s order wins will be in the range of US$8 billion rather than the US$6 billion it projected earlier.
