Keppel Corporation announced Thursday that its wholly owned subsidiary Keppel Offshore & Marine will exit the offshore rig building business.
The development, which will occur after the company completes existing rigs under construction, is being undertaken amid the global energy transition and major disruptions facing the oil industry, Keppel Corporation noted. As part of the transformation, Keppel Offshore & Marine’s business will be restructured into three parts; a Rig Co, Development Co and Operating Co. The restructuring will commence immediately and is expected to be executed over the next two to three years.
Keppel Offshore & Marine’s completed rigs will be placed under Rig Co, which will put the completed rigs to work, or sell them if there are suitable opportunities. Uncompleted rigs will come under Dev Co, which will focus on completing the rigs. Op Co, which comprises the rest of Keppel Offshore & Marine, will progressively transit to a developer and integrator role, focusing on design, engineering and procurement, Keppel Corporation noted. This business will be people and asset “light” and will seek opportunities in floating infrastructure and infrastructure-like projects, including renewables developments, Keppel Corporation outlined.
The restructuring of Keppel Offshore & Marine is expected to significantly enhance the competitiveness and relevance of the company in the longer run, but is not expected to have any material impact on the net tangible assets per share or earnings per share of the company for the current financial year, Keppel Corporation highlighted.
“The share of renewables and new energy solutions in the global energy mix has been growing rapidly, driven by environmental concerns as well as technological advancements and the declining cost of renewables,” Loh Chin Hua, the chief executive officer of Keppel Corporation and chairman of Keppel Offshore & Marine, said in a company statement.
“To seize opportunities in this fast-changing environment, we are making bold and decisive moves to transform Keppel Offshore & Marine to ensure that it remains relevant and competitive, and fully aligned to Keppel’s Vision 2030,” Hua added in the statement.