Keppel renegotiates rig contracts

Singapore: Keppel FELS has been successful in its contract renegotiations with Seadrill Jack-Ups, and will continue construction of two jackup rigs worth $420m under revised terms said to be 'mutually beneficial'.

However, parent group Keppel Offshore & Marine has seen less success in its other negotiations with Scorpion Offshore and Lewek Shipping, which have decided not to go ahead with their construction contracts. Keppel FELS Limited and Scorpion Offshore are currently seeking interested third parties to take over the building of a $405 m semisubmersible rig, although the yard has stated that the outcome of these discussions is 'highly uncertain'. Keppel Singmarine and Lewek Shipping are currently working towards an amicable mutual termination of their contract for an ultra-deepwater Multi-Function Supply Vessel, which should be finalised shortly. The cancellation of the Scorpion and Lewek Shipping contracts are not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited, the parent company of Keppel O&M, for the financial year ending 2009.

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