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Joint Venture to develop yard to build jackup rigs
Keppel Offshore & Marine (Keppel O&M) has strengthened its foothold in the offshore and marine industry in Mexico with the signing of an MOU (Memorandum of Understanding) with PEMEX Exploracion y Produccion (PEP) and P.M.I. Norteamérica, S.A. de C.V. (PMI), both subsidiaries of Mexico's national oil company, Petroleos Mexicanos (PEMEX).
The MOU is to jointly develop, own and operate a yard facility in Mexico, the first phase of which is to support the construction of six KFELS B class jackup drilling rigs for PEP.
The MOU was signed today by the General Director of PMI, Dr Jose Manuel Carrera Panizzo, and the Chief Operating Officer and CEO-Designate of Keppel O&M, Mr Chow Yew Yuen at the Ministry of Foreign Affairs in Singapore, and witnessed by Singapore's Minister for Foreign Affairs and Minister for Law, Mr K. Shanmugam and Mexico's Secretary for Foreign Affairs, Mr José Antonio Meade Kuribreña.
The MOU signifies a landmark partnership between PEMEX, the world's fifth-largest crude oil producer, and Keppel O&M, the global leader in the construction of offshore drilling rigs, ship repair and the conversion of Floating Production Storage and Offloading (FPSO) vessels.
In a congratulatory message, Mr Emilio Lozoya, CEO of PEMEX, said, "This MOU highlights PEMEX's commitment to increase oil and gas production in the long term by developing a sustainable offshore and marine industry in Mexico that can readily meet our needs. By partnering with the world's leading rig builder Keppel, we are confident that the shipyard will be a success and help to provide a wide array of solutions for the production of oil and gas. Mexico's proven reserves of oil and gas at the start of 2013 is almost 14 billion barrels of crude-oil equivalent and we believe that a significant number of shallow water and deepwater drilling rigs as well as FPSOs and FLNGs will be required to maximise production in the years to come."
Earlier this year, PEMEX unveiled investment plans of US$25.3 billion for 2013, of which US$20 billion will be targeted at upstream activities.
Mr Tong Chong Heong, CEO of Keppel O&M added, "We have been a strong supporter of PEMEX's oil and gas programme with some 19 projects delivered or on order for Mexico presently. This MOU reinforces Keppel O&M's Near Market, Near Customer strategy and places us in a strong position to capture opportunities from the continued growth of the Gulf of Mexico. Through our partnership with PEMEX, we will be able to tap each other's technological expertise and know-how to provide comprehensive world-class solutions for the Mexican market.
"The yard will not only provide local content to support the industry's growth in Mexico but also employment, training and skills development for the local workforce through Keppel O&M's training and development schemes."
PMI and Keppel O&M intend to establish a joint venture company (PMI-KOM JVC) to be the principal investment vehicle through which both parties would cooperate in various business opportunities that may be agreed upon. The first opportunity identified is the establishment of the yard to service the offshore oil & gas industry in Mexico.
To be located strategically in the modern Port of Altamira along the coast of the Gulf of Mexico, the proposed yard will help to further develop Mexico's offshore hydrocarbon potential, meeting both the growing needs of the local oil & gas industry and the international clientele operating in the Gulf.
Keppel O&M will leverage its proven expertise and operational track record in the management of the yard which will be able to service PEMEX's requirements in the offshore and marine construction and service sector, as well as independently pursue work from the private sector. To be developed in phases, the first phase will be to equip the yard to undertake certain portions of the work scope in the construction of six Keppel-designed KFELS B class jackup drilling rigs for PEP.
The total yard development cost will be around US$400 million, with the first phase estimated at about US$150 million.
Subsequent phases of the yard development would enable it to take in deep-draft semisubmersibles and drillships for repairs, undertake FPSO and Floating Liquefied Natural Gas (FLNG) vessel conversions, as well as fabricate topside modules and other offshore structures.
When all the phases are completed, the yard is expected to create up to 4,000 new direct jobs for the local community.
The abovementioned MOU is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.
Petroleos Mexicanos (PEMEX) is one of the biggest companies in Mexico and Latin America, and the most important fiscal contributor of the country. It is one of the few oil companies worldwide that develops the full productive chain of the industry, from exploration, to distribution and commercialisation of all the products.
Mexico's proven reserves of oil and gas at the start of 2013 is almost 14 billion barrels of crude-oil equivalent. Earlier this year, PEMEX announced plans to increase production by adding between eight and 12 offshore platforms to its drilling fleet and unveiled investment plans of US$25.3 billion for 2013, of which US$20 billion will be targeted at upstream activities. For more information, visit www.pemex.com
Pemex Exploración y Producción, the E&P subsidiary of Mexican national oil company Pemex, is engaged in oil and gas exploration and production services.
The mission of PEMEX Exploración y Producción is to maximize the reserves of the country, both in crude and natural gas economic value, on long term basis, guaranteeing safety, both for personnel and facilities, in harmony with the community and environment. Their main activities are oil and natural gas exploration and exploitation; conveyance, storage in terminals and first hand commercialization; these are carried out daily in four geographic regions comprising the total Mexican territory: North, South, Northeast Offshore and Southeast Offshore. Worldwide speaking PEP has the third place on crude production, the first one in offshore hydrocarbons production, the ninth one in crude reserves and the twelfth one in incomes.
PMI is the commercial arm of PEMEX in the international energy market. PMI manages PEMEX imports and exports of crude oil and refined products, supplying several markets around the world.
About Keppel O&M
Keppel O&M is a global leader in offshore rig design, construction and repair, ship repair and conversion, and specialised shipbuilding. Its Near Market, Near Customer strategy is bolstered by a global network of 20 yards in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Integrating the experience and expertise of its yards worldwide, Keppel O&M aims to be the provider of choice and partner for solutions for the offshore and marine industry.
Keppel Offshore & Marine (Keppel O&M) is a strong supporter of Mexico's oil and gas programme, having delivered projects for Mexico since 2004.
It has completed seven jackup rigs and two accommodation platforms which are successfully working for Mexico's National oil company, PEMEX, and is currently building another 10 jackup rigs to be deployed in Mexico.
Through Keppel AmFELS, its yard in Brownsville, Texas, it delivered Tonala, an ultra premium KFELS B Class jackup rig for Mexican drilling operator, Perforadora Central in 2004, followed by Tuxpan, a LeTourneau S116E rig in 2010. Another KFELS B Class jackup, Ocean Scepter, was delivered to American drilling operator Diamond Offshore in 2008, and has been chartered by PEMEX for work in Mexico. Keppel AmFELS also delivered two accommodation platforms HA-KU-M and HA-KU-S to PEMEX in 2006. More recently, it delivered Papaloapan, a LeTourneau S116E jackup, to Perforadora Central in April 2013 and is currently constructing another similar jackup, Coatzacoalcos, which is slated for delivery in 1Q 2014.
Keppel O&M's yard in Singapore, Keppel FELS, has delivered three KFELS B Class jackup rigs to Mexican customers; two for Oro Negro and one for CP Latina. A second rig for CP Latina is scheduled to be delivered in 4Q 2013. In addition, Keppel FELS is also building two KFELS B Class jackup rigs for PEMEX, five for Grupo R and one for Parden Holding.
With a total of 19 projects delivered or on order for Mexico, Keppel O&M is the leading rig provider to the Mexican market. Of the 19 projects, 14 are of Keppel's proprietary KFELS B Class design.
The KFELS B Class is an industry leading jackup design with a proven track record in the Gulf of Mexico. Developed by Keppel's technology arm, Offshore Technology Development, the KFELS B Class rigs incorporate Keppel's advanced and fully-automated high capacity rack and pinion jacking system, and Self-Positioning Fixation System. Keppel FELS currently has on order nine KFELS B Class jackup rigs from Mexican customers.
For more information, please visit www.keppelom.com
For further information, please contact:
Group Corporate Communications
Keppel Corporation Limited
Tel: (65) 64136 421
Group Corporate Communications
Keppel Corporation Limited
Tel: (65) 64136 436