SINGAPORE - Oil rig-building yards in China may offer lower prices and more attractive financing, but Keppel Fels remains unfazed by talk of keener competition and tighter margins.
The world's largest rig-builder has its own competitive edge - on-time delivery and costs that are kept within budget.
Keppel Fels managing director Wong Kok Seng told The Straits Times: "Look at our orders. The Chinese story has been there for at least two years now, but today, we're still getting our B Class orders. This year alone, when the Chinese have been playing in full swing, we've already got eight jack-ups. It sends a clear message."
This year, Keppel Fels is delivering a record 20 rigs, well over the previous peak of 13 seen in 2009. Its Tuas yard was abuzz with activity during a recent visit by The Straits Times, with workers clocking overtime hours and the building docks fully occupied.
Mr Wong's comments come amid reports of widespread job layoffs at Chinese shipyards even as they diversify into rig-building to offset their ship order slump. There has also been the recent credit crunch on the mainland.
The B Class is Keppel's signature rig and is its most popular design. Since 2010, its B Class rigs have accounted for about 45 per cent of the total number ordered among rigs of its class globally.
Developed by its technology arm and launched in 2000, the rig is able to operate in water depths of up to 120m and drill to depths of 9,000m.
Keppel Fels just delivered its 45th B Class rig recently - a fitting milestone given that this year is parent company Keppel Corp's 45th anniversary.
This rig was sent to Arabian Drilling Company 14 days ahead of schedule, on budget and with a perfect safety record, bagging Keppel Fels an early delivery bonus of US$210,000 (S$270,000). The rig will be chartered to Saudi Aramco for use in offshore Saudi Arabia.
Having on-time delivery and a more efficient rig could translate into substantial cost savings. "In our industry especially, time is money," said Mr Wong.