SHIPPING & MARINE | Staff Reporter, Singapore

Brazillian rig builder Sete Brasil's revival could boost Keppel and Sembmarine

Its total provisions made for Keppel and Sembmarine were $230m and $329m.

Hopes hold firm for Keppel Corporation (Keppel) and Sembcorp Marine (Sembmarine) as they await provisions from Brazilian rig builder Sete Brasil.

According to CIMB, which cited an Upstream report in August 2017, Sete Brasil could resume at least four drilling units in an attempt to resume operations.

Previously in 2016, Sete Brasil proposed to resume the building of eight to twelve rigs but did not conclude the charter re-negotiation with Petrobras.

"The latest development of prioritising rigs that are already at an advanced stage looks more reasonable, in our view," said CIMB analyst Cezzane See.

Keppel and Sembmarine’s rigs are at the most advanced stage of completion. These include Keppel’s semi-subs, namely Urca, at 91%, and Frade, at 70%, as well as Sembmarine’s drillships, namely, Arproado, at less than 90%, and Guarapar, at less than 80%.

However, the reactivation of these rigs may not boost cash inflow significantly as they were paid based on progress billing/completion.

On the upper hand, CIMB expects to see some reversal of provisions.

Total provisions made for the six Keppel semi-subs and seven Sembmarine drillships were $230m and $329m, respectively.

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