Forecasting a “long harsh winter ahead” in terms of work, and preparing to “hunker down,” Keppel Offshore & Marine Ltd. is bracing for tough times for the construction of oil rigs.
According to Bloomberg, the company, which is the world’s largest builder of oil rigs, does not see growth ahead for the industry, due to a surplus of oil and lower profits. The company said that the decline in orders for rigs is due to the number of rigs already in use, and a drop in the fees to lease a rig.
Keppel’s Chief Executive Officer Loh Chin Hua stated: “What we have seen in the industry, it’s not just about oil prices. We have to look at the oversupply of rigs and the current situation with the traditional customers. While the company is confident in the long-term fundamentals of the offshore and marine industry, we are mindful that a long downturn may be upon us and we have to position our business accordingly.”
Full article: World’s Largest Oil Rig Builder Plans To Hunker Down (OilPrice)