Singapore's Keppel Corporation said in a first-quarter business update it is in advanced discussions with Brazil's Petrobras for the large P-78 FPSO project, and is in negotiations with potential buyers and charterers of its drilling rig assets.

The company made a bombshell announcement in January 2021 that it was exiting the rig building business as part of a “bold transformation” of its offshore and marine business.

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It said at the time it would strive to be a developer and integrator of offshore energy and infrastructure assets.

Its division which specialises in FPSOs and other production facilities would, however, remain as a key part of the business.

The company said in its first-quarter business update on 22 April 2021 that it is actively engaging with potential buyers and charterers of its rig assets.

Loh Chin Hua, chief executive of Keppel Corporation, said the company was "not just looking at monetising the rigs, but we are also looking at whether we can do time charters".

"The team is working very hard. We are actually putting together a group of people, including some external hires, that can lead these efforts, because the skill sets required are somewhat different from what we traditionally do at the shipyard."

Chris Ong, chief executive of Keppel Offshore & Marine, said the company was "talking to a number of parties, including in leasing, operating and also of course buying. But it is premature to say anything right now, because chartering is very dependent on the charter contracts’ timeline, but we are progressing along these lines".

As far as the P-78 FPSO project in Brazil is concerned, Upstream reported on 15 April 2021 that Keppel - with subcontractors Hyundai Heavy Industries and BrasFels - is favoured to secure the contract.

Keppel said in its business update that if the contract is awarded, the company could see a doubling of its net orderbook.

The company told analysts that the P-78 FPSO was a good example of Keppel as an "integrator" of offshore opportunities.

Loh Chin Hua said: "This is in line with what we had announced, that we want to be an integrator, taking more of an EPC approach. Given the yards that we have, it will be difficult for us to build the hull ourselves, so this is actually a good arrangement."

This is in line with what we had announced, that we want to be an integrator, taking more of an EPC approach.

Loh Chin Hua

"We have a very credible partner that can build the hull. The other thing I want to say, just to be clear, is that this is on milestone payments, so this is quite attractive to us."

"Of course, the team has also been working very hard in terms of identifying the risks associated with playing the role as the integrator, and we have developed a very comprehensive plan to make sure that this project can be executed safely, on time and on budget."