Keppel CEO: Mexico offshore prospects reassuring

With many rigs yet to be chartered and day rates taking a beating, the offshore exploration and production market is entering rocky waters. On the sidelines of announcing the company’s 2014 financial year results, the CEO of Singapore’s Keppel Corporation, Loh Chin Hua, last week said that the offshore industry is troubled by uncertainty. However, growth prospects in Mexico for Keppel are encouraging.

Hua pointed to a “nervous start of the year, with threats of slower growth and deflation as well as worries on how much lower the oil price will go and how long before it recovers and stabilises.”

The CEO was upbeat on the potential for growth in Mexico. “In the coming months, our team will be working hard to finalise Keppel’s partnerships with Pemex,” Hua said, referring to the joint development of a yard in the port of Altamira on the Gulf of Mexico. “Our joint venture with Pemex […] is well-timed with the opening up of the Mexico’s oil and gas industry, which will see growth in demand for offshore services for years to come.”

This should go some way in offsetting the expected decline in global exploration and production spending, which will affect the offshore industry. According to a January Barclays survey, estimated capital spending for 2015 would in the range of $619 billion, down 9 percent from 2014.

The Keppel Corporation posted a profit of $1.4 million in 2014, up 2 percent from 2013.