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Keppel Corp Plans to Build First Yard in Mexico With PEMEX

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October 4, 2013

reuters_logo1SINGAPORE, Oct 4 (Reuters) – Singapore’s Keppel Corporation Ltd, the world’s biggest offshore jackup drilling rig builder, said it plans to build its first yard in Mexico jointly with its national oil company, to expand in Mexico’s fast-growing offshore oil and gas sector.

The first phase of the Mexican yard, Keppel’s twenty-first yard in the world, will cost about $150 million, which will support the construction of six rigs for PEMEX Exploracion y Produccion (PEP), a subsidiary of Petroleos Mexicanos (PEMEX) , Keppel said in a statement.

Keppel has not signed construction contracts for the six rigs, and declined to give details on the timeline of development of the yard.

The joint venture between Keppel Offshore & Marine and P.M.I. Norteamérica, S.A. de C.V. (PMI), a second PEMEX unit, will be set up in the next few months to take charge of the establishment of the yard, the company said.

The total cost of the yard is estimated at $400 million. Subsequent phases would enable it to repair semisubmersibles and drillships, take on conversion of FPSO (floating production, storage and offloading) and FLNG (floating liquefied natural gas) projects, as well as to build other offshore structures.

Mexico is the world’s seventh-largest oil producer and a top exporter to the United States, though its ageing oil fields threaten to turn the country into a net importer.

The Mexican government has proposed new tax regime on PEMEX, which has contributed a large chunk of tax revenue in the past, with hopes to attract private investment to help ramp up its oil production, especially in the deep waters in the Gulf of Mexico.

Keppel has delivered seven jackup rigs and two accommodation platforms that are working for PEMEX, and is working on another 10 jackup rigs to be deployed in Mexico.

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