Singapore’s Sembcorp Marine still has its sights on winning the engineering, procurement and construction contract for Altera’s floating production, storage and offloading vessel destined for Santos’ Dorado oilfield development offshore Australia.
“[We have] made good progress on the front-end engineering [and] design of an FPSO facility for Altera’s Dorado project in offshore Australia with the hope of securing an EPC contract,” the Singaporean contractor confirmed.
Sembmarine made a net loss of S$143 million (US$104.4 million) for the first half of 2022, improving from a S$647 million net loss for the six months ended 30 June one year prior.
The company attributed the first half 2022 loss to lower than breakeven activity volume, as existing orders were completed, and new orders secured during the six months would start contributing to revenue mainly in subsequent periods.
Residual Covid challenges
“Residual Covid-19 challenges also contributed to one-off increases in cost provisions and overheads in H1 2022,” Sembmarine noted.
The offshore and marine contractor’s net order book now stands at upwards of S$2.5 billion, with S$1.9 billion-worth of new work secured in the first half of 2022.
“Overall orders visibility has progressively improved since the beginning of the year, underpinned by rising oil prices and renewed concerns of energy security in the wake of geopolitical tension,” Sembmarine said.
“Oil and gas companies and energy suppliers have picked up pace in reviewing ongoing new projects and previously deferred activities. [We are] actively working on multiple tender opportunities in the offshore and marine, offshore wind/renewables and new energy segments, as well as offshore vessels upgrading projects.”
Sembmarine started this year with 16 projects on its books, 12 of which were scheduled for completion and delivery in this financial year. Seven of these dozen projects have already been delivered. Its now remaining seven projects are scheduled to be progressively delivered from 2023 to 2026.
“Measures undertaken by the group to mitigate the impact of residual Covid-19 challenges, in particular supply chain issues and skilled labour availability, have enabled [the] smoother execution of projects,” the Singaporean contractor said.
Drillship delivery highlight
A first half 2022 highlight was the delivery of Transocean’s Deepwater Atlas, the world’s first eighth-generation ultra-deepwater drillship. This is the first high-specification drillship to be designed and constructed in Singapore, based on Sembmarine’s proprietary Jurong Espadon 3T drillship design.
The vessel is the first of two Transocean drillships built by the group and the only ones in the world to feature a 3 million-pound hook-load hoisting capacity and well control systems able to accommodate 20,000 psi drilling operations.
The drillships are capable of operating in a water depth of 12,000 feet and drilling to depths of 40,000 feet, which Sembmarine hailed as a “breakthrough in the industry”.
The company posted revenues of S$1.1 billion for the six months ended 30 June 2022, a 30% increase year on year.
Ebitda for the first half of this year was negative S$19 million versus a negative S$611 million in the same period of 2021.
“Overall, operational and financial performance of the group improved significantly for the reported period with the progressive resolution of Covid-19 challenges and ongoing prudent costs and overheads management,” Sembmarine said.
The company has nearly finished building the largest liquefied natural gas bunker vessel to be constructed in Singapore, for Japan’s Mitsui OSK Lines and charterer Pavilion Energy of Singapore. Successfully launched in April 2022, the newbuild 12,000-cubic metre vessel is scheduled to undergo sea and gas trials prior to its scheduled delivery in the fourth quarter.
With the world’s energy transition under way, Sembmarine has recorded a growing share of renewables and cleaner/green solutions in its order book. At the end of last year, renewable wind energy and other cleaner and green solutions accounted for about 43% of the group’s net order book. This had expanded to 74% as of 30 June 2022.
The industry outlook for the oil and gas, offshore wind/renewables and other green solutions continues to improve; and orders visibility has become clearer in tandem, Sembmarine noted, adding it anticipates the company’s operational and financial performance to continue to improve.
“However, the group expects to make a loss for the 2022 financial year,” Sembmarine conceded.
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