Committed to sustainable development - Resilient amidst headwinds 4
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Issue 1 / 2017
www.kepcorp.com/ekeppelite
Resilient amidst
headwinds 4
Growing as
OneKeppel 24
Spotlight on HSE 32
Committed to
sustainable development
MCI (P) 095/01/2017
Contents
2
23 28 32
40 45
SUSTAINING GROWTH Groomed from within 22 EMPOWERING LIVES
Resilient amidst headwinds 4 Inspiring leadership 37
On the mark
First quarter in review 9 Sharing best practices
Changes in leadership team at 23
In conversation 11 Keppel Land Insights for the future 38
Navigating challenges 12 Celebrating World Health Day
SPECIAL FOCUS
Driving growth Growing as OneKeppel 24
Keppelites Around the World
From humble beginnings 39
Expanding footprint in Hong Kong 13 Project Autobots 27
Continuing strong tenant-centric 14 NURTURING COMMUNITIES
New home for Keppel Capital 28
approach Conserving our biodiversity 40
Stable distributions Spurring Innovations
Encouraging green practices 43
Future-focused office 29
Keppel Infrastructure signs 15
agreement with EDB to develop Championing good causes 44
Driving value creation 30
gasification facility in Singapore
Spurring sporting excellence 45
Charting new frontiers in 31
Change in leadership 16 technology Spreading cheer
Strong execution 18 Steady progress
Empowering the next generation 46
Forging partnerships in Vietnam 19 HSEMATTERS
Keppel Volunteers
Ulu Pandan NEWater Plant upgrade Spotlight on HSE 32
Making a difference 47
First delivery for 2017 20 Charting progress in Tianjin Eco-City 34
BACK PAGE
Novation of Transocean rigs to 21 Keppel Land increases stake 48
Positioned for growth 36
Borr Drilling in Saigon Centre
Fruitful visit
Divestment of Keppel Verolme
Sustaining Growth 3
Editor’s Note
Editorial Team
Editorial Advisor
Dear Readers, Ho Tong Yen
This issue marks Keppelite’s transition to a quarterly format. The move to a quarterly Editor
Sue-Ann Huang
format is in line with the Group’s efforts to streamline our publications and increasingly
take advantage of online platforms to communicate with stakeholders. Copy Editors
Brian Higgs, Song Jia Jia
Keppelite was launched in 1985, and has continuously evolved over the decades to better
Editorial Team
address the needs of stakeholders. We are constantly working to improve Keppelite, and Ang Lai Lee, Brian Lee,
to enhance it as a valuable medium on all things Keppel. Casey Chiang, Cheryl Goh,
Chua Sian Howe, Donald Sng,
Eileen Tan, Elizabeth Widjaja,
In the same vein, this issue of Keppelite highlights an important annual occasion in Keppel’s
Gabriela Hott Soares, Grace Chia,
efforts to engage employees – one of our key stakeholders – via the Global Keppelites Guo Xiaorong, Han Sufen,
Forum held on 9 February 2017. Themed ‘OneKeppel’, the annual townhall session Hayley Teo, Hoo Yao Lin,
Ivana Chua, Jayne Yeo, Kevin Ho,
reached over 2,600 Keppelites in close to 70 locations worldwide. At the session, CEO of
Lee Wan Jun, Liang Hui Hui,
Keppel Corporation, Mr Loh Chin Hua, spoke on his confidence in Keppel’s resilience as Mia Liu, Priscilla Chong,
a multi-business company, and provided an overview of the Group’s immediate priorities, Razali Maulod, Ricky Ling,
our progress towards Vision 2020 and our longer term goal of shaping a FutureKeppel Roy Tan, Serena Toh, Tang Yibing,
Tay Jia Wei, Teri Liew, Tracy Pham,
(see pages 24 to 27). Woon Pek Yong, Yolanda Guo
We also highlight recent appointments within the Keppel Group. This is part of our
Please mail your correspondence to:
succession planning, where Keppelites with the right skills and aptitude are identified
Group Corporate Communications
and groomed for advancement to take on more challenging roles in the organisation – Keppelite Editor
(see page 22). Keppel Corporation Limited
1 HarbourFront Ave, #18-01
Keppel Bay Tower
The issue wraps up with stories on how Keppel gives back to our local communities Singapore 098632
through social investments and collaborative community programmes. A key development
in this area was the opening of the Keppel Discovery Wetlands on 31 March 2017. The Email: keppelgroup@kepcorp.com
Website: www.kepcorp.com/ekeppelite
event was graced by Prime Minister of Singapore Mr Lee Hsien Loong. Keppel Discovery
Wetlands was established with a $2.08 million commitment from Keppel, which supported Keppelite is a publication of Keppel
the restoration of a freshwater forest wetland ecosystem historically found in the vicinity Corporation, and is published
quarterly by the Group Corporate
of the Singapore Botanic Gardens (see pages 40 to 42).
Communications Division. All
rights reserved. Permission from
On behalf of the team at Keppelite, thank you for your readership and support. We the publisher is required for
reproduction by any means in
welcome ideas from you on how we can make Keppelite even better.
whole or in part.
Keppelite Editor Printed in Singapore by
Image Printers Pte Ltd.
Keppelite I Issue 1 / 2017
Sustaining Growth
4 Sustaining Growth
Resilient amidst headwinds
Anchored on its multi-business strategy, Keppel continues to stay resilient amidst the
ongoing headwinds. Mr Loh Chin Hua, CEO of Keppel Corporation, discussed the
Group’s strategic developments and performance at the Company’s 1Q 2017 results
conference and webcast on 20 April 2017. Keppelite reproduces his speech.
TAPPING GROWTH the Keppel Group with many basis, our Return on Equity management, infrastructure
IN SUSTAINABLE years of secular growth. (ROE) was 7.6%. services and operations &
URBANISATION maintenance, and rental &
As we had cautioned FINANCIAL We had a smaller free cash charter activities.
at the FY 2016 results PERFORMANCE outflow of $80 million
announcement in January, For the first quarter of 2017, compared with the outflow We are focused on improving
despite the increased we achieved a net profit of of $306 million in 1Q 2016. the overall quality of our
optimism in the market $260 million, an increase Our net gearing remained earnings and the Group’s
f o l l o wi n g t h e rebound of 23% over the same almost unchanged at 0.57x recurring income, which
in oil prices, the offshore period in 2016. The drop as at end-March 2017, will better fund our capital
business continues to face in profit in the Offshore & compared to 0.56x as at spending as well as dividends.
very challenging conditions. Marine (O&M) Division was end-December 2016.
This is due to, among other offset by improved earnings OFFSHORE & MARINE
factors, the oversupply of from the Infrastructure MULTIPLE EARNINGS Amidst the continuing
rigs and support vessels. It and Investments Divisions, STREAMS downturn, Keppel Offshore
will take some time before while the Property Division Recurring income contributed & Marine (Keppel O&M)
the industry fully recovers. continued to contribute $78 million or 30% of managed to break even. The
steadily to the Group. the Group’s net profit for fall in net profit was due to the
Notwithstanding the 1Q 2017, underpinned by significantly lower volume of
headwinds, the Keppel Economic Value Added stable and fairly predictable work. While the Division
Group has remained resilient, (EVA) for the period was income from our REITs continued to make a profit
underpinned by our multi- $23 million. On an annualised and business trust, asset at the gross operating level, it
business strategy, with
different engines kicking in
to steady the Group. 0XOWLSOH(DUQLQJV6WUHDPV
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especially in Asia, is creating
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Keppelite I Issue 1 / 2017
Sustaining Growth 5
was insufficient to cover our
fixed costs. Contributions
from associates helped the
Division to break even. This
shows the importance of
the rightsizing efforts that
Keppel O&M has embarked
on since early 2015.
To keep our O&M Division
lean and fighting fit, our
rightsizing efforts have
continued. We announced
in January that we had
mothballed two overseas
yards and were in the process
of closing three supporting
yards in Singapore. We
have ceased operations
at our yard at Shipyard
Road and returned it to
Keppel FELS signed a Heads of Agreement with Borr Drilling for the novation of Transocean’s five newbuild jackup contracts to Borr Drilling
JTC Corporation at the end
of March. The closure of
the other two yards will be the start of 2015, we have have come to expect from to deliver shortly include the
announced later in the year. reduced our global direct Keppel. installation and integration
workforce by close to 18,000 of topside modules for a
To f u r t h e r o p t i m i s e or about 49%. Following Early this year, Keppel newbuild Catcher FPSO
operations and rationalise the latest reductions, the Shipyard delivered a Floating from BW Offshore and a
our global network of yards, headcount in Keppel O&M Production Storage and newbuild semisubmersible
Keppel O&M has entered is approaching a steady state Offloading (FPSO) vessel to for the State Oil Company
into a term sheet agreement that is appropriate for the Yinson Production which of the Azerbaijan Republic.
to divest Keppel Verolme, level of work in our yards. is on charter to ENI Ghana In mid-2017, we are also
our shipyard in the Nevertheless, we will actively Exploration & Production. scheduled to deliver Golar
Netherlands, to Damen monitor market conditions Hilli, the first-of-its-kind
Shiprepair & Conversion as well as explore ways to In Brazil, our BrasFELS yard floating liquefaction vessel
B.V. We will continue to achieve further cost savings has marked the sailaway of conversion in the market.
seize opportunities in Europe and ensure that Keppel O&M the first of two Replicante
and the North Sea through remains profitable despite projects, FPSO P-66, Amidst the challenges facing
our network of yards in the reduced topline. for delivery to Tupi BV, a the industry, we continue
Singapore and around the consortium represented by to work closely with our
world. KEY DEVELOPMENTS Petrobras. Our workscope customers to seek win-win
Keppel O&M’s net orderbook for the projects included outcomes. We have reached
In the first quarter, Keppel a s a t e n d - M a rc h 2 0 1 7 the fabrication, integration, an agreement with Fecon
O&M further reduced its stood at $3.5 billion, testing and commissioning International Corp on the
global direct workforce by excluding the projects for of topside modules. further deferment of its
about 1,250 or 6% compared Sete. Our yards continue to Meanwhile, work on the three KFELS B Class jackups,
to the previous quarter, execute the projects on our second Replicante, FPSO originally slated for delivery
through natural attrition, books safely, on time and P-69, is progressing smoothly. this year, to 2H 2019.
early termination of contracts on budget, and with the
and retrenchments. Since quality that our customers Other projects we are on track Continues on page 6...
Keppelite I Issue 1 / 2017
6 Sustaining Growth
...continued from page 5.
Keppel FELS has also entered PROPERTY State Capital Investment profit of about $29 million.
into a Heads of Agreement Our Property Division Corporation to collaborate We will continue to explore
with Borr Drilling for the made a net profit of on investment opportunities opportunities to scale up our
contracts of Transocean’s $103 million for 1Q in the country. presence in Greater Jakarta.
five jackup rigs to be novated 2017, down slightly from
to Borr Drilling. Under $106 million in 1Q 2016. I n Ya n g o n , M y a n m a r, In China, we have completed
the new agreement, Borr another market which the sale of our stakes in
Drilling will take over the Leveraging our first-mover Keppel Land has been in for the Chengdu and Wuxi
contracts, make a down advantage in Vietnam, we are many years, we have opened townships which will allow
payment of US$275 million deepening our presence in the 23-storey Grade A office us to channel our capital to
and undertake the remaining this growth market, with an tower in Phase One of the other projects.
payment instalments to increased stake in the Saigon Junction City development.
Keppel FELS. The delivery Centre development in Ho This was jointly developed HOME SALES
of the first three rigs has Chi Minh City. This reflects with the Shwe Taung Group, Keppel Land sold 980 homes
been brought forward to Keppel Land’s confidence and has received positive in the first quarter, with a
2017 and 2018, while the and long-term commitment interest from international total sales value of about
remaining two rigs will be to contribute to sustainable tenants. $530 million. Our overall
delivered in 2020. urbanisation in Vietnam sales volume was about
through our quality portfolio In Indonesia, in line with 4% higher year-on-year,
The deal, beyond improving of properties. We have also the Group’s strategy to comprising 730 homes in
Keppel O&M’s cashflow, is signed a Memorandum recycle assets to seek higher China, 110 in Vietnam and
a testament to the strong of Understanding, in the returns, Keppel Land has 130 in Singapore.
d e m a n d f o r K e p p e l ’s p re s e n c e o f t h e p r i m e divested its 80% effective
proprietary rigs, even in the ministers of Singapore and stake in a Surabaya property Home sales in China slowed
present market conditions. Vietnam, with Vietnam’s company, achieving a net slightly in part due to the
The Glades in Tanah Merah by Keppel Land, comprising 726 homes jointly developed with China Vanke, continues to receive positive response from homebuyers
Keppelite I Issue 1 / 2017
Sustaining Growth 7
property market cooling
measures and also because
fewer new homes were
launched in the first
quarter.
Meanwhile, home sales in
Singapore have picked up.
The Glades, comprising 726
homes jointly developed
with China Vanke in Tanah
Merah, is about 94% sold,
while homes at Highline
Residences are close to 66%
sold and those at Corals at
Keppel Bay are about 64%
sold. Our projects continue
to receive interest from
discerning homebuyers,
with a penthouse at Corals
sold in 1Q 2017 for about
$18.9 million. Keppel Infrastructure signed a 25-year Water Purchase Agreement with PUB, the national water agency, for Singapore’s fourth desalination
plant
PROPERTY PORTFOLIO
Keppel Land is in a favourable INFRASTRUCTURE the signing of the 25- just concluded an agreement
position of having a large Poised to become a y e a r Wa t e r P u rc h a s e with the Singapore
landbank comprising over stable contributor to the Agreement with PUB, the Economic Development
64,000 homes across key G r o u p ’s b o t t o m l i n e , national water agency, Board to develop, own
cities in Asia. We are not Keppel Infrastructure has f o r S i n g a p o re ’s f o u r t h and operate a state-of-the-
in a hurry to acquire land, been actively pursuing desalination plant. The art gasification facility on
and will only do so at a opportunities in energy plant is now going through Jurong Island in Singapore.
land price that will provide and environmental detailed engineering and is Securing the agreement
an acceptable risk-adjusted i n f r a s t r u c t u re , b o t h i n in the process of obtaining for development of the
return. Singapore and overseas. the relevant permits. It is Facility is an important step
expected to commence in the preparation for the
Of the 64,000 homes in Keppel Infrastructure’s net operations in 2020. final investment decision,
our pipeline, about 18,000 profit for 1Q 2017 was which will be taken at a
homes are ready for launch $30 million, up from In March, Keppel later date.
from now till 2019, and $ 1 0 m i l l i o n y e a r- o n - Infrastructure completed the
we have over a million sm year including gains on treatment capacity upgrade The Facility, now in its
of gross floor area under divestment of our stake in of the Keppel Seghers Ulu project development
development in our GE Keppel Energy Services P a n d a n N E Wa t e r P l a n t phase, will use proven
commercial portfolio. The to GE Singapore. This is in ahead of schedule and on and reliable best-in-class
commercial projects will be line with our strategy to budget. This is the first technologies to produce
progressively completed and divest non-core assets and large-scale NEWater plant hydrogen, carbon
contribute to our recurring recycle capital to pursue in Singapore to adopt a monoxide, syngas and
income, revaluation gains other opportunities. third-stage reverse osmosis other industrial gases from
and eventually, divestment configuration. a variety of feedstock,
gains when we monetise Keppel Infrastructure
the assets. began the year with Keppel Infrastructure has Continues on page 8...
Keppelite I Issue 1 / 2017
8 Sustaining Growth
...continued from page 7.
including coal and refinery assets in Singapore, Japan businesses in the Keppel our assets harder to generate
by-products. It is well- and Korea. Group can work together higher returns, as well as
positioned to meet the to provide comprehensive seize opportunities through
anticipated future demands In January, Keppel DC REIT solutions for sustainable strategic partnerships.
of Singapore’s refining completed its acquisition urbanisation. We are seeking Where appropriate, we
and chemicals industries of Keppel DC Singapore 3, more growth opportunities, could also buy completed
a n d re i n f o rc e s K e p p e l which will be its third asset building on our competencies properties and create value
Infrastructure’s capability in Singapore. and deepening collaboration through asset enhancement
as a solutions provider for across verticals. strategies, and invest in
sustainable development. As the 30-sq km operating platforms.
S i n o - S i n g a p o re T i a n j i n Keppel O&M is pushing
Data centres continue to Eco-City matures, we are into new markets and In the infrastructure space,
be an important growth seeing increasing demand revenue sources. Gas will we are strengthening
business for the Group. for its land and homes. be an important market our positions in energy
This month, Keppel Data Land in the Eco-City can be of the future, and we are and environmental
Centres and Hong Kong’s developed directly by our priming Keppel O&M to infrastructure, as well as data
PCCW Global launched 50-50 joint venture master be an industry leader with centres and logistics. The
the PCCW Global-Keppel developer Sino-Singapore an extensive gas strategy recent desalination and
International Carrier and Tianjin Eco-City Investment that spans the value chain. gasification projects are
Exchange in Hong Kong. and Development Co. Ltd; We are actively pursuing examples of how we are
The collaboration leverages or by Keppel Land or our opportunities in small-scale expanding our breadth of
PCCW Global’s extensive Chinese partner, Tianjin liquefied natural gas vessels expertise and the range of
global network connectivity Eco-City Investment and with our customers and solutions we provide.
and marks the expansion of Development Co., Ltd; or it partners. We see many
Keppel Telecommunications can be jointly developed with opportunities in this space, Keppel Capital will continue
& Transportation’s data third parties, or sold to others especially where Keppel-built to expand our capital base
centre footprint into for development. carriers and regasification with co-investors and
Hong Kong. u n i ts can b e d ep l o yed work closely with the rest
We reported in January alongside small gas-fired of the Group to drive the
INVESTMENTS 2017 that our joint venture power units. development of real assets.
Keppel’s fourth vertical, had sold three land parcels It will support our business
Investments, continues at a land auction. Such land We are also re-purposing model through growing our
to contribute steady and sales are inherently lumpy our offshore technology recurring income, as well as
recurring income streams. and may not be repeated for applications in other provide a platform for capital
in every quarter. The prices areas including floating recycling.
Our asset management of land and homes can infrastructure assets.
business recorded a net also be affected by the With agility and financial
profit of $13 million for C h i n e s e g o v e r n m e n t ’s Capitalising on the substantial discipline, we are confident
1Q 2017, compared to property cooling measures. residential landbank and that we can harness our
$15 million in the same Nevertheless, the land sales commercial portfolio that we synergies as a multibusiness
quarter last year. made a notable contribution have built up over the years, group to capture
to the Keppel Group in this Keppel Land is positioning opportunities in sustainable
Besides actively seeking new quarter, and reflects the itself as a multi-dimensional urbanisation. keppelite
investment opportunities, long-term potential of the real estate player. We have
Alpha Investment Partners Tianjin Eco-City project. built an enviable landbank
also focuses on divestment over the past decade while
activities to lock in and SEIZING OPPORTUNITIES still keeping Keppel Land’s
deliver retur ns to its IN SUSTAINABLE average ROE high at 18.4%
investors. During the first URBANISATION per annum. To continue to
quarter, Alpha-managed The Tianjin Eco-City is a good aim for the highest ROE in the
funds divested a total of four example of how different industry, we will have to work
Keppelite I Issue 1 / 2017
Sustaining Growth 9
First quarter in review
Mr Chan Hon Chew, CFO of Keppel Corporation, presented the Company’s financial
performance at the 1Q 2017 results conference and webcast. Keppelite reproduces
his speech.
In the first quarter, the Group partially offset by higher FINANCIAL HIGHLIGHTS
recorded a net profit of profits from the Investments
$260 million, which was 23% and Infrastructure Divisions. S$m 1Q 2017 1Q 2016 % Change
higher than the same quarter
last year. Correspondingly, Despite lower operating Revenue 1,248 1,743 (28)
earnings per share (EPS) profit, profit before tax Operating Profit 187 278 (33)
increased to 14.3 cents. increased by 24% or
$68 million due to higher Profit before Tax 346 278 24
E VA w a s h i g h e r a t share of profit from Net Profit 260 211 23
$23 million, and annualised associates, in particular
the share of gains from EPS (cents) 14.3 11.6 24
ROE increased to 7.6%.
the divestments of Central
Free cash outflow was Park City in Wuxi and The
$80 million as compared Botanica in Chengdu, as and lower revenue from $122 million pre-tax profit
to free cash outflow of well as contributions from The Glades, which obtained last year.
$306 million in the first the Sino-Singapore Tianjin Te m p o r a r y O c c u p a t i o n
quarter of 2016 due mainly Eco-City from the sales of Permit in December 2016. The Property Division’s
to a slowdown in working three land parcels. This was partly offset by pre-tax profit was 11% or
capital increases in O&M. higher revenue from the $15 million lower than in
After tax and non-controlling handover of completed the corresponding quarter
Net gearing at 57%, was interests, net profit was units in the Waterfront in 2016, as a result of lower
at about the same level as higher by 23% or $49 million, Residences in Wuxi and operating results, partly
at the end of financial year translating to an EPS of higher revenue recognition offset by higher share of
2016. 14.3 cents. from construction progress profits from associates as
in Highline Residences in a result of gains from the
FINANCIAL HIGHLIGHTS SEGMENTAL REVIEW Singapore. divestment of stakes in
The Group’s revenue for At the Group level, revenue trading projects, namely
the first quarter was 28% at $1,248 million was The Infrastructure Division’s Central Park City in Wuxi and
or $495 million lower than 28% lower than the same revenue rose by 20% due to The Botanica in Chengdu.
the same quarter last year. quarter last year, led by increased sales in the power
Lower revenue from the lower revenues from the and gas business. The Infrastructure Division
O&M and Property Divisions O&M Division as a result of registered a $19 million
were partially offset by lower volume of work and The Group recorded increase in pre-tax profit, due
higher revenue from the deferment of some projects. $346 million of pre-tax profit to higher contributions from
Infrastructure Division. for the first quarter of 2017, the power and gas business
The Property Division too 24% or $68 million higher as well as the gain from the
A s a re s u l t , o p e r a t i n g saw lower revenues, due than last year. divestment of GE Keppel
profit for the quarter at mainly to the absence of Energy Services.
$187 million was lower by revenue from Eight Park Due to the year-on-year
33% or $91 million. Lower Avenue in Shanghai, which drop in revenue, the O&M
profits from the O&M and obtained Occupancy Permit Division was just able to
Property Divisions were in the first quarter last year, break even, compared to the Continues on page 10...
Keppelite I Issue 1 / 2017
10 Sustaining Growth
...continued from page 9.
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Pre-tax profit from the The Group’s net profit of by dividend income from
Investments Division of $260 million for the quarter associated companies and
$181 million was driven translated to an EPS of divestment proceeds.
mainly by higher share 14.3 cents, 24% higher than
of profit from the Sino- the first quarter of last year. As a result, there was an
Singapore Tianjin Eco-City overall free cash outflow
arising from the sales of three FREE CASH FLOW of $80 million during the
land parcels, write-back of Cash flow from the Group’s quarter, a $226 million
provision for impairment of operations was $118 million decrease from the free cash
investments, recognition of in this quarter, down from outflow of $306 million in
fair value gains on KrisEnergy $342 million in the same the same period in 2016.
warrants, and profit on quarter of last year. keppelite
the sale of investments,
partly offset by share of loss Net cash outflow from
in KrisEnergy. operating activities was
$9 million, as compared to
After tax and non-controlling an outflow of $335 million
interests, the Group’s net in the first quarter of 2016.
profit increased by 23% or This was due mainly to a
$49 million to $260 million slowdown in working capital
as compared to the same increases in O&M.
period in 2016, with the
Investments Division being Net cash outflow from
the top contributor to the investing activities was
Group’s earnings at 48%, $71 million comprising
followed by the Property advances to associated
Division at 40% and the companies and operational
Infrastructure Division at c a p i t a l e x p e n d i t u re o f
12%. $117 million, partly offset
Keppelite I Issue 1 / 2017Sustaining Growth 11
In conversation
Keppelite shares highlights of Keppel Corporation’s 1Q 2017 results Question &
Answer session, where senior management addressed issues and concerns of the
financial community.
Q: Why did O&M amounting to $46 million; Even after the write-back of Moving forward, the team
revenue come down so 2) the divestment of our the provision, there was still a is working hard to pursue
much in 1Q 2017? associate, GE Keppel Energy net share of loss this quarter other opportunities in terms
LCH: The lower O&M Services; and 3) the gain on for KrisEnergy. of liquefied natural gas,
revenue was due to lower disposal of subsidiaries and specialised vessels, Jones Act
volume of work. As the associates such as Central Q: How many vessels and also repurposing
volume of work was low, Park City in Wuxi and The Singaporeans have been our offshore technology for
the gross operating profit Botanica in Chengdu. let go in your rightsizing non-drilling applications.
was not sufficient to entirely efforts since 2015 and keppelite
cover our fixed costs. This Q: Can you elaborate on in 1Q 2017? Are you
also demonstrates the the $46 million write- expecting further staff LCH – Mr Loh Chin Hua,
importance of our rightsizing back on impairments reduction in the next CEO of Keppel Corporation
efforts, which we have been of investments? What quarter?
CHC – Mr Chan Hon Chew,
executing since 2015. changed during the LCH: For the first quarter of
CFO of Keppel Corporation
quarter to allow the 2017, Keppel O&M reduced
Q: Under which division write-back? its workforce by 1,246 or by CO – Mr Chris Ong,
does the “project based” CHC: The $46 million about 6% from the previous Acting CEO of Keppel
earnings of $125 million write-back pertains to quarter. We do not give a Offshore & Marine
come from? KrisEnergy. As KrisEnergy breakdown of the different
CHC: The “project based” is our associated company, nationalities, and I think it
earnings are mainly from we equity account for our is not pertinent as far as our
the O&M Division, as well as share of its results. Given results are concerned. What
the Property Division’s sale of that KrisEnergy is a listed is more important is that we
residential homes. company, there is a one are approaching a steady
quarter time lag in our equity state. But of course, we will
Q: Can you provide a accounting of its results. In have to monitor this closely
breakdown of the 1Q 2017, we recognised our to ensure that our workforce
$150 million on share of KrisEnergy’s loss for is appropriately sized for the
the write-back of 4Q 2016, which amounts to work that we can see going
impairments, gain on about $90 million. forward.
disposal of subsidiaries
& associates and gain on Given that we made a Q: How has your order
investments disclosed provision for the impairment inflow in the O&M
in your financial of KrisEnergy in 2016, Division been so far this
statement? we have to write back year?
CHC: The $150 million the provision after equity CO: For the order inflow
comprises three parts – accounting for our share of in 1Q 2017, we have Jan
1) the write-back on the losses. Otherwise, it would De Nul exercising its option
impairments for KrisEnergy be double counting. f o r t h e t h i rd d re d g e r.
Keppelite I Issue 1 / 201712 Sustaining Growth
Navigating challenges
Keppel Telecommunications Net profit for the same profits from associated healthcare account, using
a n d Tr a n s p o r t a t i o n period fell by 13.1% to companies. The subsidiaries Courex’s crowd-sourcing
(Keppel T&T) posted lower $11.6 million due to lower disposed were subsequently platform, and will continue to
revenue for the quarter contribution from the data equity accounted at the pursue and capture growth
ended 31 March 2017, centre division arising from Group. in e-commerce fulfilment
slipping 15.6% to disposal of subsidiaries and and urban logistics.
$40.7million from $48.3 weaker performance from Ear nings per share for
million in the same period the logistics division, partly the period was 2.1 cents The data centre division’s
last year. offset by higher share of while net asset value per footprint will increase by
ordinary share was $1.44 at 195,000 sf of gross floor
31 December 2016. area with the completion
of the PCCW Global-
While outlook for the logistics Keppel International Carrier
division remains challenging Exchange (Hong Kong) and
due to slowing economic the expected completion
and trade growth as well of Keppel DC Singapore 4
as margin pressures from in 2Q 2017. In Europe, the
intense market competition, division is taking over the
the division continues to operations at Keppel DC
explore and seize new Frankfurt 1 and is engaging
opportunities. The division potential customers to fill
recently rolled out last mile up the remaining space.
The logistics division rolled out last mile delivery services with a key healthcare account, using
Courex’s crowd-sourcing platform
delivery services with a key keppelite
Driving growth
Keppel DC REIT achieved The year-on-year increase 20 January 2017. The 2017, has been renewed for
$21.8 million of distributable in distributable income was REIT also obtained tax five years.
income for the first quarter contributed by the one-off transparency treatment
ended 31 March 2017, 47.6% capital distribution in relation for its share of the taxable The Manager remains
higher than the same period to the Keppel DC Singapore income arising from the 90% confident of the data
last year. Correspondingly, 3 acquisition, income from interest, similar to Keppel DC centre market’s growth
its distribution per unit of the acquisitions announced Singapore 1 and 2. potential underpinned by
1.89 cents was 13.2% last year, as well as lower the increasing demands of
higher than the same period property-related and other As at 31 March 2017, the the digital economy and
last year. expenses. REIT’s portfolio occupancy data centre outsourcing
rate was 95.1% with a requirements. keppelite
No distributions were Keppel DC REIT completed long weighted average
declared for the quarter as the acquisition of 90% lease expiry of 9.2 years.
Keppel DC REIT declares i n t e re s t i n K e p p e l D C A major contract at one of
distributions on a half-yearly Singapore 3, adding a the Singapore colocation
basis. third asset in Singapore on assets, which was expiring in
Keppelite I Issue 1 / 2017Sustaining Growth 13
Expanding footprint in Hong Kong
Keppel Data Centres
and PCCW Global have
launched the PCCW
Global-Keppel International
Carrier Exchange (ICX)
in the international
telecommunications hub
of Hong Kong to provide
faster interconnects for
businesses.
Keppel Data Centres is
a joint venture between
Keppel Telecommunications
& Transportation (Keppel
T&T) and Keppel Land
while PCCW Global is the
inter national operating
division of HKT, Hong Kong’s
premier telecommunications
service provider.
The PCCW Global-Keppel
Launching the PCCW Global-Keppel International Carrier Exchange were (from L-R), Mr Sunny Yeung, SVP, Global Services & Operations, PCCW
ICX is based on robust Global; Mr Frederick Chui, SVP, Global Data Sales and Presales, PCCW Global; Mr Marc Halbfinger, CEO, PCCW Global; Mr Thomas Pang, CEO,
design requirements and Keppel Telecommunications & Transportation; Ms Tan Lee Kheng, GM, Technical Solutions, Keppel Data Centres; and Mr Jonathan Sim, Head,
Business Development (North APAC), Keppel Data Centres
features more than 7,800 sf
of dedicated network
facility management space Keppel Data Centres connectivity, the ICX venture cable as well as the global
w i t h re d u n d a n t p o w e r and PCCW Global had aims to address the demand network of data centres of
configuration. entered into a long-term for access performance and both companies.”
collaboration agreement for network security arising
The ICX is located in the same the development of the ICX from cloud services, big Mr Marc Halbfinger, CEO
building as the AAE-1 city last year. The collaboration data, and rich media in of PCCW Global, said, “We
Point of Presence (PoP) and is seeks to utilise the vast business critical applications. are very pleased to see the
connected to the submarine submarine cable capacity in exciting ICX opening which
cable landing stations of the region to provide fast, Mr Thomas Pang, CEO of highlights our very positive
Hong Kong and other hyper- quality interconnections Keppel T&T, said, “The ICX relationship with Keppel T&T.
scale data centres via an with Asia, the Middle East, marks Keppel T&T’s first step Our customers and carrier
extensive fibre network Africa, Europe and North into the Hong Kong data partners now have more low-
supplied by HKT. The optimal America. centre market and brings latency Hong Kong Island
and secure global network together the best that PCCW choice in accessing digital
connectivity meeting point Leveraging Keppel Data Global and Keppel Data solutions for responding
makes it a preferred choice Centres’ technical expertise Centres have to offer under to the increasing cloud
for companies looking to and operational track one roof. Customers in our adoption in the region.”
establish network edge record and PCCW Global’s ICX will enjoy connectivity keppelite
PoP. extensive global network to the city PoP of the AAE-1
Keppelite I Issue 1 / 201714 Sustaining Growth
Continuing strong tenant-centric
approach
Keppel REIT achieved For 1Q 2017, share of results REIT has no refinancing (by net lettable area) due
$48.1 million in distributable of associates grew 23.2% requirements till 2018 and for renewal and review
income for 1Q 2017, 11.6% y-o-y to $23.1 million due beyond, the Manager is respectively.
lower year-on-year (y-o-y) mainly to one-off income proactively reviewing early
due mainly to absence of from One Raffles Quay and refinancing of loans, as Looking ahead, the
income from the divested Marina Bay Financial Centre. well as exploring attractive Manager is cognisant of the
77 King Street in Sydney in Share of results of joint funding sources. uncertain global economic
January 2016, lower income ventures increased 22.2% environment and competitive
contribution from Bugis y-o-y to $8.3 million as a Despite the oversupply office leasing landscape in
Junction Towers, as well result of higher income in the office market, the Singapore.
as absence of other gains contribution from David M a n a g e r ’s c o n t i n u o u s
distribution. Malcolm Justice Centre tenant engagement efforts The Manager will continue
in Perth. All-in interest have resulted in the REIT i t s p ro a c t i v e p o r t f o l i o
Property income and rate was 2.57%, with achieving a portfolio tenant management and prudent
net property income for interest coverage ratio retention rate of 87% and capital management
1Q 2017 also declined and aggregate leverage high committed portfolio approach, and remains
correspondingly. Distribution at 4.6 times and 38.4% occupancy of 99.4% as at committed to a portfolio
per unit for the quarter was respectively as at end- end-March 2017. The optimisation strategy to
1.45 cents, translating to an 1Q 2017. REIT has minimal leasing provide sustainable returns
annualised distribution yield risks for 2017, with only to Unitholders in the
of 5.5%. Notwithstanding that the 2.8% and 1.7% of leases long term. keppelite
Stable distributions
Keppel Infrastructure during the cable outage KIT’s distributable cash 1Q FY17 was higher than
Tr u s t ( K I T ) a n n o u n c e d between 20 December flows for the quarter ended the same period last year due
a distribution per unit of 2015 and 12 June 2016; 31 March 2017 was to higher contributions from
0.93 cents for the first quarter and higher revenue from $34.2 million. This was Basslink and KMC, coupled
ended 31 March 2017. Keppel Merlimau Cogen $5.9 million lower than the with lower depreciation
(KMC). same period last year due to and amortisation expenses.
Group revenue for the first time lag in the adjustment of These were partially offset
quarter was $155.3 million, However, these were partially gas tariffs to reflect actual fuel by lower contribution from
18.3% higher than the offset by lower contributions cost at City Gas and abortive City Gas due to the time
same period last year, due from the Concessions for expenses incurred by the lag in the adjustment of
to higher contributions from the waste-to-energy (WTE), Trust in connection with a gas tariffs to reflect actual
City Gas as a result of higher NEWater and desalination potential acquisition, partially fuel cost.
town gas tariff and higher plants as the 1Q FY16 revenue offset by higher contribution
volume of town gas sold; included construction from KMC. CityNet was also replaced
higher facility fees from revenue recognised from as trustee-manager of
Basslink as no facility fees the Senoko WTE plant Profit attributable to NetLink Trust with effect
were recognised in 1Q FY16 boiler upgrade. Unitholders of the Trust in from 3 April 2017. keppelite
Keppelite I Issue 1 / 2017Sustaining Growth 15
Keppel Infrastructure signs
agreement with EDB to develop
gasification facility in Singapore
Keppel Infrastructure (KI) has
signed an agreement with
the Singapore Economic
Development Board (EDB)
to develop, own and
operate a state-of-the-
art gasification facility on
Jurong Island, Singapore.
The agreement marks
the culmination of a
competitive selection
process conducted by EDB
as part of the Jurong Island
v2.0 initiative. Securing the
agreement for development
of the facility is an important
step in preparation for the
final investment decision, Signing the agreement to develop a gasification facility are (from left): Dr Ong Tiong Guan, CEO of Keppel Infrastructure, and Mr Damian Chan,
ED, Energy & Chemicals, Singapore Economic Development Board
which will be taken at a
later date.
of Singapore’s refining and “Under the Jurong Dr Ong Tiong Guan, CEO
The facility, now in its project chemicals industries. Island v2.0 initiative, we of KI, said, “With the
development phase, will explored alternative support of EDB, Keppel
use proven and reliable A significant development feedstock options to Infrastructure is pleased
best-in-class technologies is the global sulphur cap enhance the long-term to be working on the
t o p ro d u c e h y d ro g e n , of 0.5%, announced by competitiveness of the energy development of this facility
carbon monoxide, syngas the International Maritime and chemicals sector,” said which will leverage various
and other industrial gases O r g a n i z a t i o n ’s M a r i n e Mr Damian Chan, ED, Energy feedstock and synergies
from a variety of potential Environment Protection & Chemicals, EDB. with available infrastructure
feedstock, including coal Committee, requiring all to deliver competitively
and refinery by-products. ships to comply with the “After extensive evaluation, priced products to
As part of its commitment reduced (from 3.5%) sulphur we found that gasification customers. It also reinforces
to sustainability, KI will also emissions limit by 1 January would be able to meet K e p p e l I n f r a s t r u c t u re ’s
develop energy-efficient and 2020. As the refining industry i n d u s t r y ’s d e m a n d f o r capability and commitment
R&D projects to augment in Singapore adopts the competitive hydrogen and as a solutions provider for
the facility. production of low sulphur carbon monoxide, while sustainable development.”
compliant fuel, there will the use of best-in-class keppelite
The facility will be well- be increased demand for mitigation technologies
positioned to meet the hydrogen from existing and would minimise its
anticipated future demands new customers. environmental impact.”
Keppelite I Issue 1 / 201716 Sustaining Growth
Change in leadership
is the Chairman of responsible for the Group
Bennett Offshore, Keppel Accounts for Keppel
LeTourneau USA, Bintan Corporation.
Offshore Fabricators and
Keppel SLP and a director M r Ta n s u c c e e d e d
of various subsidiaries or Mr Wong Ngiam Jih,
associated companies of who retired as CFO
Keppel O&M. of Keppel O&M on
31 March 2017 after over
Mr Ong is also a board 40 years of service with the
member of the Institute Keppel Group.
o f Te c h n i c a l E d u c a t i o n
Board of Governors, and a
member of the Association
of Singapore Marine
Industries, Workplace Safety
& Health Council Marine
Mr Chris Ong Mr Paul Tan Industries Committee,
and U EnTech Steering
Committee.
KEPPEL OFFSHORE & the global leader in the
MARINE offshore business that it is Mr Ong has a Bachelor and
Mr Chris Ong, MD of Keppel today. Master Degree in Electrical
FELS, has been concurrently and Electronics Engineering
appointed Acting CEO of “On behalf of the Board from the National
Keppel Offshore & Marine of Keppel O&M, I welcome University of Singapore.
(Keppel O&M) with Chris in his new role. I He is a Chartered Engineer,
effect from 1 April 2017. am confident that he will a Fellow of the Institute
Mr Ong succeeded Mr Chow provide effective leadership of Marine Engineering,
Yew Yuen, who retired on to Keppel O&M in the next Science and Technology,
31 March 2017 after stage of the company’s and a member of the
36 years of service with the development.” American Bureau of
Keppel Group. Shipping.
Mr Ong, 42, joined Keppel
Mr Loh Chin Hua, CEO FELS in 1999, and has held In addition, Mr Paul Tan,
of Keppel Corporation a range of key appointments Group Controller of Keppel
and Chairman of Keppel in Keppel FELS, including Corporation, has been
O&M, said, “Chris is part GM (Engineering), Acting concurrently appointed as
of the talent pool which ED (Operation), ED CFO of Keppel O&M with
we have been nurturing for (Commercial) and Deputy effect from 1 April 2017.
leadership succession at MD, before being appointed
Keppel O&M. He has been MD of Keppel FELS on 5 July Mr Tan joined the Keppel
with the Keppel Group 2016. Group in 1980 and has
for 17 years, and has held various management
contributed significantly to A p a r t f ro m h i s ro l e i n positions within the Group.
building Keppel FELS into Keppel FELS, Mr Ong Since 1988, he has been
Keppelite I Issue 1 / 2017Sustaining Growth 17
Mrs Goh has been a As the pioneer CEO of
non-executive and Keppel REIT Management
independent director of the when the REIT was listed in
Manager since 5 October April 2006, Mr Tan played an
2016. She is currently the instrumental role in the early
Co-Chairman and Senior years of the REIT’s growth.
Partner of Allen & Gledhill
LLP, a leading law firm in Mr Tan has been with the
Singapore. She has been Keppel Land group since
a Partner since 1982 and 1990. Prior to his most
has headed the Corporate recent appointment as CEO
Real Estate Department for of Keppel REIT Management,
many years. he was President of
Singapore for Keppel Land
Mrs Goh regularly acts for and concurrently Head of
listed corporations, private Keppel Land Hospitality
equity funds and real estate Management. He oversaw
Mrs Penny Goh Mr Tan Swee Yiow investment trusts, and has Keppel Land’s investment
extensive experience in and development operations
advising on corporate real in Singapore, as well as
KEPPEL REIT has been a Director since estate transactions involving its hospitality management
MANAGEMENT 14 September 2010, will major commercial projects in arm. keppelite
Keppel REIT Management also step down from the Singapore and Asia Pacific.
has appointed Mrs Penny Board after serving for
Goh as Chairman of its almost seven years. Professor Keppel REIT Management
Board from 22 April 2017. Tan Cheng Han, 52, who has also welcomed one of
Mrs Goh, 64, takes over from has served on the Board its founding leaders back to
Dr Chin Wei-Li, Audrey Marie, for more than four years, take the helm.
59, who will step down from will also relinquish his seat
the Board after more than to assume his appointment Mr Tan Swee Yiow, 56,
12 years of service. Dr Chin as Chairman of Singapore has been appointed CEO
has served on the Board since Exchange Regulation Pte Ltd. and Executive Director of
3 February 2005. Both Mr Tan and Professor Keppel REIT Management,
Tan will step down from the manager of Keppel REIT,
Mr Tan Chin Hwee, 45, who 1 July 2017. effective 20 March 2017.
Fuel for thought
Nothing is predestined. The obstacles of your past can become the
gateways that lead to new beginnings.
Ralph Blum, writer
Keppelite I Issue 1 / 201718 Sustaining Growth
Strong execution
Focusing on execution
excellence, BrasFELS has
delivered a number of
milestone projects for Brazil’s
offshore oil and gas industry.
In the first quarter of 2017,
the shipyard added to its
strong track record with the
departure of the Floating
Production Storage and
Offloading (FPSO) vessel
P-66 from its facilities, as
well as the delivery of the
well-intervention vessel Siem
Helix I.
FPSO P-66
On 4 February 2017, P-66,
the first of the Replicante
series of FPSO units, left
BrasFELS to be deployed in
the Lula Sul field in Santos
Basin, Brazil.
P-66, the first of the Replicante series of FPSO units, left BrasFELS for deployment in the Lula Sul field, Santos Basin, Brazil
FPSO P-66 is BrasFELS’ project
for Tupi BV, a consortium Mr Kwok Kai Choong, CEO capacity of 150,000 barrels of project for Helix Energy
comprising Petróleo and President of Keppel FELS oil per day and six million m3 Solutions.
Brasileiro S.A. – (Petrobras), Brasil, said, “We are proud of gas per day. It also
BG E&P Brasil – a subsidiary to partner Petrobras on has a storage capacity of The work scope comprises
of Royal Dutch Shell plc, and the Replicante projects and 1.6 million barrels of oil. the design, fabrication and
Petrogal Brasil. deliver the FPSO P-66 to their installation of a bulk transfer
highest satisfaction. It will BrasFELS has built up system as well as a new
BrasFELS was engaged for add to Keppel’s track record extensive capabilities and mezzanine deck. In addition,
two Replicante projects, of delivering more than 30 experience in FPSO projects the shipyard undertook the
P-66 and P-69. The shipyard’s safe and successful major over the years. Including zone reclassification of the
work scope for the projects projects for Brazil. Work FPSO P-66, the shipyard mud pit room.
includes the fabrication, on the second Replicante has completed seven FPSO
integration, testing and FPSO, P-69, is progressing projects since 2010. Siem Helix I departed from
commissioning of topside well and we look forward BrasFELS on 8 March 2017.
modules. The Replicante to continuing to work with SIEM HELIX I It is slated for operations
FPSOs are a series of FPSOs Petrobras as their choice Siem Helix I arrived at in Santos Basin, located
of similar design and shipyard in tapping Brazil’s BrasFELS on 26 December w i t h i n B r a z i l ’s p re - s a l t
specifications ordered by vast oil and gas resources.” 2016 for upgrading works. region. keppelite
Petrobras for the Santos The well-intervention
Basin pre-salt region. FPSO P-66 has a production vessel is the shipyard’s first
Keppelite I Issue 1 / 2017Sustaining Growth 19
Forging partnerships in Vietnam
Keppel Land signed on investment opportunities signing were the Prime In Vietnam, Keppel Land
a Memorandum of in Vietnam. M i n i s ter o f Si n g ap o re, is one of the largest and
Understanding (MOU) with Mr Lee Hsien Loong, and the pioneer foreign real estate
Vietnam’s State Capital The MOU was signed by Prime Minister of Vietnam, developers with a diverse
Investment Corporation Mr Ang Wee Gee, CEO Mr Nguyen Xuan Phuc. portfolio of properties in
(SCIC) on 23 March 2017 in of Keppel Land, and Hanoi, Ho Chi Minh City,
Hanoi. The MOU will see the Mr Nguyen Duc Chi, Chairman Mr Ang said, “Vietnam is Dong Nai and Vung Tau
two companies collaborate of SCIC. Witnessing the one of Keppel Land’s key including Grade A offices,
growth markets where we re s i d e n t i a l p ro p e r t i e s ,
are committed to deepen integrated townships and
o u r p re s e n c e . We a re award-winning serviced
constantly on the lookout apartments.
for strategic alliances with
like-minded partners to grow With 20 licensed projects
our business. across Vietnam and a pipeline
of more than 25,000 homes,
“This win-win partnership Keppel Land is establishing
will see Keppel Land and itself as the choice developer,
SCIC collaborate on projects distinguished by quality and
The Memorandum of Understanding between Keppel Land and Vietnam’s State Capital in Vietnam, and put Keppel innovative lifestyle concepts.
Investment Corporation (SCIC) was signed in Hanoi by Mr Ang Wee Gee (seated, far left), CEO Land in good stead as we keppelite
of Keppel Land, and Mr Nguyen Duc Chi (seated, far right), Chairman of SCIC, and witnessed
by the Prime Minister of Singapore, Mr Lee Hsien Loong (second from left), and the Prime look towards scaling up our
Minister of Vietnam, Mr Nguyen Xuan Phuc (second from right) presence in the country.”
Ulu Pandan NEWater Plant upgrade
First NEWater plant in Singapore to feature third-stage reverse osmosis configuration.
Keppel Seghers, a wholly- To e x p a n d t h e p l a n t ’s of KI, said, “The Keppel Singapore’s aim to achieve a
owned subsidiary of Keppel capacity, Keppel Seghers Seghers Ulu Pandan NEWater sustainable and secure water
Infrastructure (KI), has installed a third-stage reverse Plant is the first large-scale future.”
completed the treatment osmosis (RO) system that plant in Singapore to adopt a
capacity upgrade of the recycles the reject water from third-stage RO configuration. The Keppel Seghers Ulu
Keppel Seghers Ulu Pandan the second-stage RO system, P a n d a n N E Wa t e r P l a n t
NEWater Plant on 11 March thereby boosting the plant’s “As the original designer u p g r a d i n g w o r k s w e re
2017. designed and contracted and builder of the plant and planned and executed
capacity to 162,800 m 3 its current operator, Keppel without affecting the
Keppel Seghers embarked of NEWater daily, up from Infrastructure is uniquely plant’s overall operational
on the upgrading project 148,000 m3 previously. placed to deliver this upgrade availability. keppelite
on 29 April 2016 and it which has raised the plant’s
was completed ahead of Mr Tan Boon Leng, ED, ability to deliver high-grade
schedule and on budget. Environmental Infrastructure reclaimed water to support
Keppelite I Issue 1 / 201720 Sustaining Growth
First delivery for 2017
On 16 February 2017, Mr Michael Chia, MD (Marine 1.7 million barrels, with an be a valuable addition to
Keppel Shipyard delivered a & Technology) of Keppel oil processing capacity of ENI Ghana’s exploration
Floating Production Storage Offshore & Marine (Keppel 58,000 barrels per day. It and production activities,
and Offloading (FPSO) vessel O&M), said, “Over the years, has a design life of 20 years strengthening their presence
to Yinson Production (West we have strengthened our without dry docking and can in Africa.”
Africa) Pte Ltd (Yinson), a relationship with our repeat be moored in an average
wholly-owned subsidiary customers, Yinson and ENI water depth of 1,000m with Keppel Shipyard’s work on
of Yinson Holdings Berhad, Ghana, and we are glad to a total topside weight of FPSO John Agyekum Kufuor
safely. support them once again in almost 15,000 tonnes. included modification
providing FPSO solutions to work, new equipment
The spread-moored FPSO unit the market. Mr Lim Chern Yuan, Group installation complete with
was named John Agyekum CEO of Yinson, said, “There associated piping, electrical
Kufuor during a ceremony “We have a strong track are opportunities in the FPSO and instrumental systems,
held at Keppel Shipyard on record of customising FPSOs market and we are glad to as well as installation and
3 February 2017. It is being for a wide variety of fields. be able to meet those needs integration of the FPSO
chartered by ENI Ghana FPSO John Agyekum Kufuor through our FPSO solutions. process topsides. keppelite
Exploration & Production is our 27th conversion Our trust and confidence
Limited (ENI Ghana) to project for Africa, and 125th in Keppel extends back to
process oil and gas from the overall.” 2014 when we worked
Offshore Cape Three Points together on FPSO Lam Son.
block located in Offshore FPSO John Agyekum Kufuor We are confident that FPSO
Ghana. has a storage capacity of John Agyekum Kufuor will
Celebrating the naming of the spread-moored Floating Production Storage and Offloading unit, John Agyekum Kufuor, are H.E. Rebecca Akufo-Addo (first row, fifth from right), First Lady of the
Republic of Ghana; Mr John Agyekum Kufuor (first row, fourth from right), former President of the Republic of Ghana; Mr Chow Yew Yuen (first row, third from left), then-CEO, Keppel Offshore
& Marine; and Mr Lim Han Weng (first row, extreme left), Group Executive Chairman, Yinson Holdings Berhad
Keppelite I Issue 1 / 2017Sustaining Growth 21
Novation of Transocean rigs to
Borr Drilling
Keppel FELS, a wholly-owned the five jackup rigs currently conditions. The completion scheduled between 2016
subsidiary of Keppel Offshore being built by Keppel FELS for of transaction is expected to and 2017, but had been
& Marine (Keppel O&M), has Transocean will be novated to take place before end-May deferred by Transocean to
entered into a Heads of Borr Drilling. 2017. 2020. The first three rigs will
Agreement with Borr Drilling now be delivered between
Limited of Bermuda (Borr The transaction is subject I n 2 0 1 3 , Tr a n s o c e a n 2017 and 2018, while the
Drilling), with the approval to all three parties executing had ordered five KFELS remaining two rigs will be
of Transocean, whereby the definitive agreements and Super B Class jackup rigs delivered in 2020. This will
construction contracts for satisfying formal closing from Keppel FELS for enable Keppel to improve
US$1.1 billion and made a cash flow and minimise risks
20% down payment. Under of the projects.
the new agreement, Borr
Drilling will take over the The deal is a testament
contracts and undertake to the reliability of and
the remaining payment strong demand for Keppel’s
instalments to Keppel FELS. proprietary KFELS Super
The price for each rig is B Class rigs, even in the
US$216 million, compared present challenging market
to the original price of conditions.
US$219 million. Borr Drilling
will also make a down The KFELS Super B Class rigs
payment of US$275 million. are designed to operate in
400 ft water depth and drill
The delivery dates of the to 35,000 ft. keppelite
Transocean’s five jackup rigs, under construction at Keppel FELS, will be novated to Borr five rigs were originally
Drilling on completion of the deal
Divestment of Keppel Verolme
Keppel Offshore & Marine optimise its operations and Keppel Verolme is situated in on 10 April 2017. The parties
(Keppel O&M) has entered rationalise its global network Rotterdam, the Netherlands, will work towards finalising
into a term sheet agreement of yards. and has about 250 d e f i n i t i v e a g re e m e n t s ,
w i t h D a m e n S h i p y a rd s employees. Damen intends and the completion of the
Group (Damen) for the Keppel O&M continues to to continue activities in the transaction will be subject
sale of its shipyard, Keppel see opportunities in the shipyard with the current to closing conditions and
Verolme. offshore oil and gas market employees of the yard. the receipt of relevant
in Europe and the North approvals.
The proposed sale comes Sea, and will service these A notification of the proposed
after a strategic review by markets through its network transaction has been filed The targeted timeline to
Keppel O&M and is part of of yards in Singapore and with the Dutch Authority close the transaction is by the
the company’s efforts to globally. for Consumers & Markets end of 2Q 2017. keppelite
Keppelite I Issue 1 / 2017You can also read
