Keppel bags US$820m order wins from Mexican company

Four jackup rigs will be delivered by 2015.

According to OCBC Investment Research, Keppel Corporation (KEP) announced that it has secured contracts to build four jackup rigs worth US$820m for Mexican drilling company, Grupo R. 

The rigs will be built to KEP’s proprietary KFELS B Class design and are scheduled for delivery progressively from 2Q15 to 4Q15.

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Recall that KEP also secured contracts to build two similar rigs for PEMEX in Dec last year for US$420m. As mentioned in our earlier notes, the strong demand coming from Mexico is within our expectations, as PEMEX plans annual capital expenditures of ~US$30b till 2019 to stem the country’s declining oil production.

We see KEP as one of the beneficiaries of these developments. The group has secured new O&M orders worth about S$1.6b YTD, accounting for ~32% of our full year estimate.