Seatrium Limited (formerly SembCorp Marine and KOM)

The allegation is a real risk for both, SembMarine and Keppel Corp's Brazil operation, more than the lower oil price, IMO

(not vested in both)

SembMarine reveals more information about bribery case in Brazil

SINGAPORE (March 30): Sembcorp Marine ( Financial Dashboard) has received a copy of a plea bargain between Brazilian authorities and a former employee of Petrobras who alleged that representatives of the rig builder had paid bribes to secure contracts from subsidiaries of Sete Brazil, a firm partly owned by the national oil company.

According to the plea bargain, former Petrobras engineering manager Pedro Jose Barusco had made allegations against an individual by the name of Guilherme Esteves de Jesus in connection with the contracts.

"GDJ (Guilherme Esteves de Jesus) is connected to companies which were engaged by these subsidiaries as consultants in connection with the contracts," SembMarine said in a statement today.

"The company learnt on 28 March 2015 that arising from allegations made by Barusco, GDJ was arrested by the Brazilian authorities on 27 March 2015," the rig builder said, adding that it was unable to comment on the allegations and that it was carrying out its own investigation into the matter.

"The company and the group have a strict anti-bribery policy and do not condone any action that will result in the violation of any country’s anti-corruption laws," it said.

Citing claims by Barusco, Brazilian news magazine Veja last month reported that representatives of SembMarine and Keppel Corp ( Financial Dashboard) paid more than US$6 million ($7.5 million) in bribes to officials of Petrobras and Sete Brasil.

The two rig builders have denied the allegations.
...
http://www.theedgemarkets.com/sg/article...ase-brazil

http://infopub.sgx.com/FileOpen/Divestme...eID=344341

Quote:

DIVESTMENT OF SEMBCORP BOURNEMOUTH WATER INVESTMENT

SINGAPORE, April 16, 2015 – Sembcorp Industries (the Group) announces that its wholly-owned UK subsidiary, Sembcorp Holdings Limited, has completed the sale of its 100% stake in Sembcorp Bournemouth Water Investment (SBWI) to the Pennon Group PLC (Pennon) for an enterprise value of £191.5 million (approximately S$393 million), with cash proceeds from the sale of £104.5 million (approximately S$214 million).

SBWI is an investment holding entity which owns Sembcorp Bournemouth Water (SBW), whose principal activities involve the operation of a regulated municipal water business based in Bournemouth, UK. SBWI also owns two smaller unregulated businesses which offer water supply, leakage detection and water hygiene services to companies. Pennon is a UK-based environmental utility infrastructure company and the parent company of South West Water Limited, which provides water and sewerage services for Devon, Cornwall and parts of Dorset and Somerset in the UK. With the completion of the divestment, SBWI and SBW cease to be subsidiaries of Sembcorp Industries.

The transaction is expected to generate a net gain of £25 million (approximately S$50 million) for the Group for the financial year ending December 31, 2015.

(Not vested)

Analysts are pessimistic on the company, for good reasons...

Sembcorp Marine kept at ‘sell’ by Maybank with lower target price of $2.45

SINGAPORE (Apr 28): Weaker order intake and ship-repair revenue at Sembcorp Marine ( Financial Dashboard) has led Maybank ( Financial Dashboard) Kim Eng to cut FY15-FY17 earnings per share forecasts by 2%-8% for the marine and offshore engineering group.
...
http://www.theedgemarkets.com/sg/article...-price-245

The confidence on both Keppel Corp and Sembcorp Marince, lie with the financing support to Sete Brasil. It is close, but not confirmed yet...

(not vested on both)

Sembcorp Marine’s major customer close to receiving financing

SINGAPORE (June 15): Bloomberg has reported that Sete Brasil, a major customer of Sembcorp Marine (Financial Dashboard), could be close to receiving up to US$5 billion ($6.7 billion) of financing with Petrobras’ board and banks’ directors providing some US$4 billion.

Petrobras owns 10% of Sete Brasil.

The financing would be for its scaled-down newbuild programme which involve seven drillship orders with Sembcorp Marine, six semi-submersible rigs with Keppel Corp ( Financial Dashboard) and two drillships with Brazil-based Rio Grande.
...
http://www.theedgemarkets.com/sg/article...-financing

The poor market condition will sustain for a while...

(not vested)

SembMarine’s 2Q15 earnings down 17% to $109 mil

SINGAPORE (July 29): Sembcorp Marine ( Financial Dashboard), the marine and offshore engineering group, posted a 17% decline in 2Q15 earnings to $109 million from a year ago.

This was below the 2Q consensus earnings estimate of $138.5 million by Bloomberg.

Persistently low oil prices have escalated the ongoing cuts in global exploration and production capital expenditure, says SembMarine in its filing.

“Some customers are also deferring or seeking to defer the delivery of their ordered rigs on a lack of charter contracts,” it adds.
...
http://www.theedgemarkets.com/sg/article...17-109-mil

I re-iterate my view on the local yards here again:

http://www.valuebuddies.com/thread-745-p...#pid117060

Time frame uncertain as the drag will be years...

Somewhere along the time line many of local offshore support industry players will issue certificates to their unfortunate shareholders...

Odd Lots Vested
GG

(29-07-2015, 09:06 PM)CityFarmer Wrote: The poor market condition will sustain for a while...

(not vested)

SembMarine’s 2Q15 earnings down 17% to $109 mil

SINGAPORE (July 29): Sembcorp Marine ( Financial Dashboard), the marine and offshore engineering group, posted a 17% decline in 2Q15 earnings to $109 million from a year ago.

This was below the 2Q consensus earnings estimate of $138.5 million by Bloomberg.

Persistently low oil prices have escalated the ongoing cuts in global exploration and production capital expenditure, says SembMarine in its filing.

“Some customers are also deferring or seeking to defer the delivery of their ordered rigs on a lack of charter contracts,” it adds.
...
http://www.theedgemarkets.com/sg/article...17-109-mil

http://www.valuebuddies.com/thread-5541-...#pid117130

(29-07-2015, 09:31 PM)greengiraffe Wrote: I re-iterate my view on the local yards here again:

http://www.valuebuddies.com/thread-745-p...#pid117060

Time frame uncertain as the drag will be years...

Somewhere along the time line many of local offshore support industry players will issue certificates to their unfortunate shareholders...

Odd Lots Vested
GG

(29-07-2015, 09:06 PM)CityFarmer Wrote: The poor market condition will sustain for a while...

(not vested)

SembMarine’s 2Q15 earnings down 17% to $109 mil

SINGAPORE (July 29): Sembcorp Marine ( Financial Dashboard), the marine and offshore engineering group, posted a 17% decline in 2Q15 earnings to $109 million from a year ago.

This was below the 2Q consensus earnings estimate of $138.5 million by Bloomberg.

Persistently low oil prices have escalated the ongoing cuts in global exploration and production capital expenditure, says SembMarine in its filing.

“Some customers are also deferring or seeking to defer the delivery of their ordered rigs on a lack of charter contracts,” it adds.
...
http://www.theedgemarkets.com/sg/article...17-109-mil

Hi buddies,

I am looking at the 7 drillships and hope to find some status of them.

[Image: q2-results-review-of-sembcorp-industries.html]

From the chart, I look up the various operators of the drillships.

Odfjell Drilling:
http://hugin.info/157018/R/1923447/689760.pdf page 7, there is no information on delay in construction or downsizing or cutting of cost.

However, the operator still go back to Petrobas. So Petrobas's fate really affect many.

Seadrill:
A big mystery here. As you can see from the above chart, 3 drillships will be operated by Seadrill. But the whole of seadrill fleet (even those under construction) did not include any of the 3 ships.

I thought they might have change the ship name. So I look up the details of the drillships one by one

http://www.seadrill.com/our-fleet.aspx

They are mainly constructed by Korea yards, and mainly Samsung Yard.

Perhaps construction has not started? But Camburi has started construction last year.

[Image: q2-results-review-of-sembcorp-industries.html]

Anyone can explained what happened?

hi, i am not able to see the first image. Nonetheless, here is what i know:

From AR14, the first drillship name is Arpoador (operator is Petrobras). from some archive reports here: http://www.shipbuildinghistory.com/histo...lships.htm, it seems like this drillship was the 7th drillship captured from EAS's inability to deliver everything on time. The original delivery date for this drillship was 3Q16 but i think there was some switching here/there and Arpoador is supposed to be delivered by mid 2015 (this is the date of the first drillship delivery to Sete Brasil when the contracts were signed in 2011) as the first drillship to be delivered to Sete.

Work has started on the 2nd drillship at Jurong Shipyard (Guarapari) in Oct2013. This is the first drillship that ODFJELL is going to receive in June2016, and tallying with 2011 statements, there is ~9-12months delay on this 2nd drillship. 3rd drillship (camburi), to be operated by Seadrill started work at Jurong Shipyard in July2014.

(all these info can be found in SCM's AR13/14)

It doesn't take much to infer that there is already a delay for some of these drillships (And most probably for the rest of them), while there is still no cancellation announcements for any of them now (risks remain especially that SCM has been named as 1 of those who allegedly paid bribes)

Some additional info i reviewed and thoughts:

http://www.valor.com.br/node/4050760

(1) The unilateral cancellations by EAS (because Sete didn't pay up) and playing hardball seems like more than meets the eye. The Jap/Chinese have much to lose and initial thoughts that EAS cancellations will provide a boast to SCM/Keppel (in terms of probability of financing issues or order cancellations), seems naive at best. The most probable outcome seems like the Jap/Chinese bankers will seem to pull EAS through, and actually at a better position than SCM/Keppel.

(2) SCM/Keppel orders seem to be 'safe' thus far officially but it seems like both yards are resigned to finance 2 orders each (820mil usd/order) themselves. This means both of them have to come up with additional 1.65bil usd of capital for both the building/financing and all the downsides simply remain with them (ie. Sete can walk away any time)

(3) SCM's 2 drillships to be build at Tuas (who can forget these 2 orders that were speculated to be on 10:90 terms!) with Transocean has been delayed by 24months, having a similar fate with Keppel's 5 jackup rig orders. There seems to be a perfect storm for SCM - After their decision to incur huge CAPEX at Integrated Yard to consolidate operations and also bring forward Phase 2 CAPEX by a few years, the Petrobras scandal came up and to be followed by Oil prices plunge. The Integrated Yard is now suffering from ship repairing revenue reductions and also the under utilization of new jackup/drill ship orders despite the huge amount of CAPEX spent in the next few years at least. It may not turn out to be as cost productive as initially claimed by Mgt.