Keppel order win an encouraging sign: Barclays

Despite the numerous orders for Keppel (BN4.SG) for accommodation semi-submersibles and semi-submersible tender rigs, there have been concerns on the ability of the company to win drilling semi-submersible contracts, Barclays says in a note.

The US$800 million ($1 billion) contract win from SOCAR announced Tuesday marks the first non-Petrobras drilling semi-submersible contract for Keppel Corp since 2008, and should dispel some of those fears, it says.

"We reiterate our view that the strengthening demand in key semi-submersible markets could lead to several semi-subs this year," the house says. "Although there is no guarantee that the Singapore yards will get any contracts, a stronger demand picture should likely improve the supply and demand balance and could help ease some pressure on pricing and margins," it adds.

Keppel remains the house's top pick in the rig-building space given its strong order and financial outlook.