Sembcorp Marine - In the running for Statoil’s FPSO contract
- According to Upstream, Norway’s Statoil will host key meetings this month with a group of contractors vying to build the hull and living quarters for a newbuild FPSO vessel for its Johan Castberg project in the Barents Sea.
- Upstream’s sources said that three South Korean players (Daewoo, Hyundai, Samsung) and one Singaporean yard (Jurong Shipyard) are in the running for this contract , though Wood Mackenzie has pointed out that a final investment decision could slip into 2018 due to “project economics, complexity and Statoil’s stretched finances”.
- It is encouraging to hear of talks about new capital expenditure; we had been expecting new order wins of about S$1.5b for SMM in 2017, mostly relating to production rather than drilling, as well as potential wins from Gravifloat.
- Should new order flows be greater than expected, we would relook our estimates.
- Meanwhile, we maintain our HOLD rating and S$1.43 fair value estimate on SMM.