Operations Review - Sembcorp · PDF fileOperations Review In percentage terms, ... in West...
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56 Sembcorp Marine Ltd Group Quarterly Results YEAR IN REVIEW Sembcorp Marine delivered satisfactory results in 2011 underpinned by its rig building, ship conversion and offshore, and ship repair sectors. Turnover for the Group was $4.0 billion with the rig building sector contributing $2.2 billion, followed by the ship conversion and offshore sector at $1.1 billion, the ship repair sector at $644 million, and others at $38 million. Operations Review In percentage terms, the rig building sector accounted for 56 per cent of total turnover, followed by the ship conversion and offshore sector at 27 per cent, the ship repair sector at 16 per cent, and others at 1 per cent. Aerial view of Jurong Shipyard. Ship Repair Rig Building Ship Conversion/Offshore Others Turnover By Sectors 2011 $4.0 Billion 16% 27% 56% 1% 2010 $4.6 Billion 67% 18% 14% 1%
Transcript of Operations Review - Sembcorp · PDF fileOperations Review In percentage terms, ... in West...
56 Sembcorp Marine Ltd
Group Quarterly ResultsYEAR IN REVIEW
Sembcorp Marine delivered satisfactory results in 2011 underpinned by its rig building, ship conversion and offshore, and ship repair sectors. Turnover for the Group was $4.0 billion with the rig building sector contributing $2.2 billion, followed by the ship conversion and offshore sector at $1.1 billion, the ship repair sector at $644 million, and others at $38 million.
Operations Review
In percentage terms, the rig building sector accounted for 56 per cent of total turnover, followed by the ship conversion and offshore sector at 27 per cent, the ship repair sector at 16 per cent, and others at 1 per cent.
Aerial view of Jurong Shipyard.
Ship Repair
Rig Building
Ship Conversion/Offshore
Others
Turnover By Sectors
2011$4.0 Billion
16%
27%
56%
1%
2010$4.6 Billion
67%
18% 14%1%
57Annual Report 2011
Operations Review
Sector ReviewShip Repair Sector
2011 2010
Number of vessels 264 282
Average value per vessel ($m) 2.44 2.29
Turnover ($m) 644 646
The ship repair sector was the third largest sector with a turnover of $644 million. A total of 264 vessels docked at the Group’s shipyards, lower than the 282 vessels in 2010. However, the average value per vessel increased from $2.29 million in 2010 to $2.44 million in 2011.
In terms of vessel mix, repairs for tankers contributed to 31 per cent of ship repair turnover, followed by LNG/LPG vessels at 17 per cent, drillship/FPSO upgrading at 13 per cent, passenger vessels at 12 per cent, bulk carriers at 7 per cent, containerships at 6 per cent, support vessels at 4 per cent, and other vessels at 10 per cent.
Revenue Contribution (%) 2011 2010
Alliance/FCC 42 38Regulars 40 47Total 82 85
Others 18 15Grand Total 100 100
Alliance and Favoured Customer Contract (FCC) partners and regular customers continued to support the Group with a steady base-load, accounting for 82 per cent of all repairs for the year. In 2011, the stable of alliance partners grew with the addition of Teekay Marine Services (Canada) which awarded the Group a long-term contract for the repairs, refurbishment and upgrading of its fleet operating in the Far East.
Navion Savonita, the first Teekay vessel repaired by Sembawang Shipyard for new alliance partner Teekay Marine Services during the year.
Types of Vessels Repaired/Upgraded
2011 2010
Tanker Container Bulk Carrier LNG/LPG Passenger OthersDrillship/FPSO Upgrading Support Vessels
10%16%
24%
9% 9%
7%
6%
29%4%
13%
12%
17%7%
6%
31%
FPSO PSVM, converted from a VLCC tanker by Jurong Shipyard for contractor MODEC, gears up for deployment offshore Angola by owners BP Exploration (Angola) and Block 31 partners.
Successful hook-up and commissioning of Premier Oil Natuna Sea’s Gajah Baru Platforms – comprising a 2,000mt wellhead platform and a 8,300mt central processing platform –
in West Natuna Sea, offshore Indonesia, following engineering, procurement and construction by PT SMOE Indonesia.
58 Sembcorp Marine Ltd
Group Quarterly Results
Ship Conversion & Offshore SectorThe ship conversion and offshore sector was the second largest revenue contributor at $1.1 billion, accounting for 27 per cent of the Group’s turnover. As a leading provider for the conversion of floating production storage and offloading (FPSO) systems and the turnkey engineering and construction of offshore platforms, the Group delivered three FPSO units, one offshore vessel and one offshore platform project in 2011.
Number of Deliveries 2011 2010
FPSO 3 3Offshore vessel 1 -Platform 1 1Rig conversion - 1Total 5 5
Rig Building SectorThe rig building sector accounted for the largest share of revenue at $2.2 billion, contributing to 56 per cent of turnover in 2011. A total of three jack-up rigs and four semi-submersible rigs were delivered on or ahead of schedule during the year. The Group set an industry record in December 2011 with the delivery of Singapore’s largest newbuild high-specification jack-up rig – West Elara, the Group’s first harsh-environment jack-up capable of North Sea operations. Transocean Honor, the first of a series of proprietary Pacific Class 400 design jack-up rigs, was also delivered in 2011.
A record of four ultra-deepwater semi-submersible rigs were delivered in the year, a testimony of the Group’s proven innovative fast-track capabilities in semi-submersible rig construction.
Number of Deliveries 2011 2010
Jack-up 3 7
Semi-submersible 4 2
Total 7 9
YEAR IN REVIEW
59Annual Report 2011
Contracts SecuredContracts secured for 2011 stood at $3.72 billion as compared with $3.0 billion in 2010. For 2012 as at March 13, it was $1.7 billion (excluding ship repair and upgrades) as compared with the corresponding period in 2011 at $361 million.
Net Order BookThe Group’s net order book, including new contracts secured as at March 2012, stood at $6.8 billion as compared with $4.8 billion for the same period in 2011. As at December 2011, the net order book was $5.1 billion as compared with $4.4 billion in 2010.
Operations Review
Contracts Secured (for the year)
4000 _
3000 _
2000 _
1000 _
0 _
Jack-up
Semi-submersible/ Accommodation Rig/Intervention Rig
Conversion & Offshore
Platforms
2010
3,041
3,724
2011
S$’M
Contracts Secured (as at 13 March)
361
1,734
2000 _
1500 _
1000 _
500 _
0 _
Jack-up
Semi-submersible/ Accommodation Rig/Intervention Rig
Conversion & Offshore
Drillship
2011(13 March)
2012(13 March)
S$’M
Net Order Book (for the year)
6000 _
5000 _
4000 _
3000 _
2000 _
1000 _
0 _
S$’M
Jack-up
Semi-submersible/ Accommodation Rig/Intervention Rig
Conversion & Offshore
2010 2011
4,418
5,096
Jack-up
Semi-submersible/ Accommodation Rig/Intervention Rig
Conversion & Offshore
Drillship
Net Order Book (as at 13 March)
S$’M
7000 _
6000 _
5000 _
4000 _
3000 _
2000 _
1000 _
0 _
2011(13 March)
2012(13 March)
4,779
6,830
60 Sembcorp Marine Ltd
Group Quarterly Results
its January 2012 report, the International Monetary Fund (IMF) forecasted world output to increase by 3.25 per cent in 2012. The growth is mainly driven by the expansion of emerging economies, particularly China and India, which have been growing at a significantly higher rate than advanced economies over the past decade. According to IMF, emerging economies are projected to grow 5.75 per cent in 2012. Based on these projections, global oil demand is widely expected to grow in the long term.
Oil prices remain strongDespite the economic and financial turmoil in Europe and the United States, crude oil prices have remained relatively strong. Oil prices ended on a record average high, with the Brent at US$111/bbl, up from the previous annual record of US$98.52/bbl.
Outlook and Underlying Market DriversThe fundamentals driving the oil and gas industry remain intact despite the macro-economic uncertainty that affected the global markets in 2011. World oil demand continues to grow, and supply remains tight with oil prices remaining above the US$100/bbl range, resulting in increased exploration and production spending by major and national oil companies.
Global oil demand continues to growThe world oil demand continues to rebound from the economic shock of 2008-2009. Global economic growth is driving the increase in energy consumption and despite the economic turmoil and financial strains in Europe and the United States, global output is continuing to rise. In
YEAR IN REVIEW
Brent Crude Oil Price
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M2004 2005 2006 2007 2008 2009 2010 2011 2012
120 _
100 _
80 _
60 _
40 _
20 _
0 _
140 _
USD/BBL
USD/BBL
Global Oil Demand
USD $’M
500,000 _
400,000 _
300,000 _
200,000 _
100,000 _
0 _
_ 120
_ 100
_ 80
_ 60
_ 40
_ 20
_ 0
19
80
19
75
19
90
20
00
2010
2011
e
2012
e
2013
e
2009
14%8%
7%E&P Spending WTI Crude Price
Source: DnB NOR Markets, FactSet
61Annual Report 2011
Gulf of MexicoWater depths:- 1000-3000mChallenges:- Sub-salt- Hurricane season- Extreme water depthsPromising areas:- Lower Tertiary
BrazilWater depths:- 1000-3000mChallenges:- Pre-salt- 5-7000m beneath sea floor- 2000m salt layer- High pressure/high temperaturePromising areas:- Santos Basin, Tupi and Campos
West AfricaWater depths:- 1000-2100mChallenges:- Political unrest- Sabotage by rebelsPromising areas:- Angola: Block 16, 17 & 18- Ghana: Jubilee- Nigeria: Bonga & Agbami
ArcticWater depths:- Up to 3000mChallenges:- Harsh environment with regions of all year ice- Minimising impact on a fragile ecosystem- Safety systems and evacuation- No infrastructure
Water depths:
Shallow
Deep
Brent crude is now trading at an average of US$113/bbl. As the oil companies’ appetite for additional rig capacity is driven mainly by oil prices, the fundamental outlook for the offshore oil and gas exploration and production sector looks highly positive in the near future.
The “Golden Triangle” – Brazil, the Gulf of Mexico and West Africa – will continue to spur the demand for ultra-deepwater rigs over the next years. In addition to these
regions, new areas are also emerging. The year 2011 saw several new oil and gas discoveries, including a few in new frontiers (see map).
This development is expected to continue, as the search for new plays drive oil companies to uncharted regions, often in remote
locations, such as Alaska or the Brents Sea.
Exploration and production budgets are growingReflecting market conditions and the need to find
new oil sources, oil majors have been increasing their capital
expenditure budgets for exploration and production activities. Deepwater
expenditures are expected to account for a substantial and increasing portion of
the total budgets and spending. While shale projects are attractive, the deepwater sector,
being a major source of new oil and gas supply, is expected to gain increasingly strong interest
from oil and gas companies.
Operations Review
Source: DnB NOR MarketsNew Oil and Gas Discoveries
Designed for enhanced operational efficiency and safety, the high-specification F&G JU3000N jack-up, jointly developed by Jurong Shipyard, Noble and rig designer Friede & Goldman, is capable of operating in challenging conditions, including high-temperature areas such as Middle East and the North Sea.
