STEng – BT

ST Marine makes play for OSV market

With oil industry demand rising, it’s chasing jobs, seeking more yard space

ST Marine is joining its more high-profile yard brethren in the black gold rush, in pursuit of contracts to build offshore support vessels (OSVs).

As the business division of ST Engineering that is known more for its military contracts turns its attention to the oil bonanza, its president Ng Sing Chan has his hands full these days, simultaneously courting the offshore market and looking for more yard space.

‘I’m doing things in parallel – chasing jobs, looking for additional capacity,’ Mr Ng told BT.

While he is toying with the idea of running a project in parallel in two existing sites or buying a site from someone else, he has ruled out greenfield sites because they will take too long to get up and running.

‘By the time you finish infrastructure development, the market could be changed,’ said Mr Ng.

The urgency is, in a way, a proxy for how quickly the tide is turning in favour of the offshore industry, with demand rising first for oil rigs in the last quarter of 2010 and trickling down the chain to the OSVs involved in the dozens of operations spawned by drilling activity.

While yards under the Sembcorp Marine and Keppel banners spent the last few quarters bagging big-digit deals for platform supply vessels and dive support construction vessels, ST Marine largely flew under the radar where commercial vessels were concerned.

‘When the rest of the Singapore yards were building jack-ups and semisubmersible rigs and floating production, storage and offloading vessels, ST Marine was not,’ Mr Ng said.

Over the last decade, ST Marine has been more preoccupied with naval vessels, roll on/roll off carriers and – as part of a recent development – environmental services. But as drilling activity in deeper waters intensified, ST Marine began looking closer at the OSV market in 2008.

The approach paid off, too; by 2010, the business division crossed the $1 billion revenue mark for the first time, driven by its shipbuilding and ship repair segments.

Now, ST Marine is intent on making up for lost time.

‘We intend to be a player in every segment of the OSV market: anchor handling tug supply (AHTS) vessels, platform supply vessels, seismic research vessels. We have touched on every segment of the market, with the exception of the big construction support vessels,’ said Mr Ng.

The orders have already started coming in at a fast clip in the first half of the year. Its US shipyard (VT Halter Marine) won a contract to build an offshore tug; Swire Pacific Offshore Operations has ordered four AHTS vessels at one go; and it has a deal to convert an accommodation vessel to a multi-purpose offshore vessel.

The venture into new territory inherently implies uncharted waters, but ST Marine appears serious about wading into the OSV market, even if it means building up a track record from scratch.

One of its yards is currently doing something it has never done before: converting a rig into a mobile offshore production unit. The yard will have to extend the legs of the rig so that it can function in deeper waters.

‘It’s a first for us, but we’re confident we will do well. Does that mean that we’re now experts in jackups? No, not yet,’ said Mr Ng.

Comments are Closed