The Straits Times / The Business Times News on Cosco

Cosco announces first contract for jack-up rig

WITH Singapore yards brimming with orders for offshore rigs until 2009, desperate buyers - especially those with tight deadlines - are now looking further afield and, like with all other things, China is now positioning itself as a strong competitor.

China's Cosco Corporation (Singapore), which is listed on the Singapore Exchange's main board and is one of the world's leading shiprepair, marine engineering and shipping groups, announced yesterday its first order for a US$124 million jack-up rig from Remedial Cyprus Ltd.

The elevating support vessel will be built at the Nantong, China, shipyard of Cosco's 51 per cent owned subsidiary, Cosco Shipyard Group, using the main foundation of the Super M2, Friede and Goldman's state-of-the-art jack-up design.

The jack-up, scheduled for delivery in the third quarter of next year, is designed to operate in waters up to 325 ft deep and will be equipped with three thrusters for maximum manoeuvrability and three heavy lift cranes.

Said Cosco's vice chairman and president Ji Hai Sheng: 'We are delighted that Remedial has awarded the contract to Cosco Shipyard. This is an important milestone for Cosco Shipyard Group as this is our first jack-up contract. We also note with satisfaction that discussion for a second jack-up unit has commenced with Remedial.'

In the last couple of months, Cosco, in preparation for its new offshore rig-building focus, has been hiring experienced technical staff from shipyards in Japan, Korea and Singapore.

In January, Cosco announced its first newbuilding orders for six supramax bulk carriers and one semi-submersible oil rig worth a total of US$450 million.

Cosco reported a 28 per cent growth in net profit to a record $205.4 million for the year ended Dec 31, 2006, from $160.5 million the year before, thanks to surging ship repair and conversion orders. Revenue also jumped nearly 40 per cent to a record $1.22 billion from $873 million the previous year.

But all is not lost for Singapore as SembCorp Marine, the world's second-largest builder of offshore rigs after Keppel Offshore & Marine, has a 30 per cent stake in Cosco Shipyard Group.

SembMarine's order books for rigs is in excess of $8 billion while Keppel has orders worth over $10 billion.