This is why Diamond Offshore shifted to Sembcorp for semi-sub upgrade

Looks like Keppel is losing a loyal customer as Diamond inked a US$135m contract with Sembcorp.

According to CIMB, Sembmarine has been awarded a US$135m contract from Diamond Offshore to revive a cold-stacked 1,500ft shallow water semi-sub. The cold-stacked rig will arrive in Sembmarine’s yard next week and delivery is scheduled for 2Q14. "We are pleasantly surprised by the win given that Diamond Offshore has historically been Keppel Corp’s customer for semi-sub upgrades."

Here's more from CIMB:

Upon completion, the new semi-sub Ocean Apex will be able to operate in mid-water depths of 6,000ft, beyond the specifications of a 4th generation newbuild unit (1985-1990s). Total construction cost for Diamond Offshore, including its own equipment, is US$370m.

We believe Sembmarine’s yard availability vs. the former’s could be the key reason. However, the contract is about 10% cheaper than an earlier unit (Ocean Onyx) secured by Keppel in Jan 2012 for US$150m. This contract brings YTD wins to about S$8.3bn and order book to S$11.8bn.

Sembmarine is due to announce a contract for two FPSO topside modules from Petrobras, potentially worth US$950m, similar to the two units that Keppel Corp clinched recently.

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