14 August 2012

Cosco - clinched US$170M Jack-Up Drilling Rig Contract

Cosco announced on yesterday that its subsidiary had secured a USD170M contract from Talland Navigation Limited Corporation, a subsidiary of Foresight Limited (London) to build 1 unit Jack-up Drilling Rig based on the LeTourneau Super 116E Class design. The Rig will be built to ABS classification, with notation A1, and will be a self-elevating drilling unit. The Rig with drilling depth of up to 30,000 feet, will be capable of operating in 350 feet water, with accommodation for up to 120 persons on board. The Rig will be equipped for efficient operation and layout, optimization of deck space, ease of material handling, and safety of personnel on board. The Rig is scheduled to be delivered in the first quarter of 2015.

This is one of the few announcements Cosco has made this year, making its venture into oil & gas sector more successfully. While we cannot tell the profit margin is, we cannot deny that Cosco is slowing in shipbuildings and switching its focus to higher margin projects in offshore & marine sector.

Cosco shares price has been hit by the news on slower demand and cancellation of the ship building orders from its customers from Eurozone. I believe it is still working hard to follow other shipbuilder's trend to transform itself to higher technology (or higher margin) company. Nonetheless, we expect a steep learning curve as we have seen from Sembmarine. We do expect more competition from this sector, and may squeeze down the profit margin in long future.

At this moment, I believe the shares price of Cosco will be getting more impact from oil & gas industry, other than the main impact from dry bulk index.

1 comment:

  1. Rig List
    Your blog is awe-inspiring. I have found many new things. Your way of staging is also fascinating. You have elected very incredible topic. I appreciated it.


Related Posts Plugin for WordPress, Blogger...

View All My Posts Here