Sembcorp Marine to build new shipyard in Brazil

February 8th, 2010

SINGAPORE (Dow Jones) – Rig builder Sembcorp Marine Ltd. said that its wholly-owned unit, Jurong Shipyard, will build a new shipyard in Brazil to take advantage of the strong offshore oil and gas exploration and production market in that country.

Sembcorp, in a statement, said the unit has acquired 825,000 square meters of land in the Aracruz municipality near the Espirito Santo Basin, one of Brazil's recently discovered pre-salt oil basins. The shipyard will be capable of various works like drillship construction, building of semi-submersible rigs, drilling rig repairs, ship repairs and modification.

Sembcorp didn't say how much the new shipyard will cost or when construction work will be completed. It said, however, that the construction won't have material impact on earnings and net tangible assets per share for the current financial year.

Brazil's huge capital expenditure plans to develop its fields are boosting hopes among Singaporean rig builders for substantial orders. State-run Petroleo Brasileiro (PBR), or Petrobras, has also announced massive exploration plans at its Santos Basin and is expected to place rig orders worth US$17 billion over the next five years.

Sembcorp's Brazil investment follows two separate investment plans announced in November.

Sembcorp is currently building a new offshore and marine facility in Singapore and will spend about S$750 million on the first phase of the construction, which is expected to take four years to complete from December 2009