SEO Version
19
Annual Report 2013
1. WHAT WERE YOUR MOST IMPORTANT EFFORTS IN
FY2013?
Notwithstanding difficult market conditions and
greater competition, we successfully secured ship
and offshore orders for 41 product units, compared
to 24 for the previous year, with a total value of US$3
billion.
The competition was very intense and it was
extremely challenging to secure the higher value
jobs. We had to work a lot harder. However, we have
built a sizeable base of satisfied customers over the
years and have received repeat orders from quite a
number of them.
As most of the contracts executed and delivered in
2013 were secured at lower prices in earlier years,
understandably our efforts were also focused on
higher productivity, managing costs and maximising
our resources including minimising material wastage.
That was not an easy task, as we had to contend
with increasing material and execution costs while
adhering to stringent quality standards and project
timelines.
2. WHAT IS YOUR VIEW ON THE PERFORMANCE OF
THE OFFSHORE MARINE ENGINEERING SERVICES
SEGMENT SO FAR? AND WHAT IS THE OUTLOOK FOR
THIS SEGMENT GOING FORWARD?
Wewere fortunate that theGroupdecided seven years
ago to diversify into the offshore marine segment. It
gave us the first-mover advantage to acquire the
technical know-how and execution experience ahead
of others in the competitive shipbuilding industry in
China.
We did better than expected in securing new offshore
marine contracts for 2013. Orders for 23 new projects
were received compared to 19 for 2012. In this respect,
our shipyard group fared better in this segment than
most other shipyards in China.
Significantly, we received quite a number of
repeat orders from satisfied customers in the last
couple of years, which attests to our ability to meet
sophisticated specifications and quality expectations.
In particular, we had new orders for platform supply
vessels (PSV), semi-submersible tender assist drilling
rig, LNG vessel, high-end floating accommodation
unit (FAU), Le Tourneau jack-up drilling rigs, semi-
submersible accommodation vessel, and other types
of products.
With the delivery in October 2013 of the “Sevan
Louisiana”, the sixth generation Sevan 650 III ultra
deep-water cylindrical drilling rig capable of drilling
depth up to 12,000 metres, COSCO has fully proven
its capability in the design and manufacturing
programme for such products.
In addition to the Sevan series, we also have on our
order book two Le Tourneau Workhorse jack-up
drilling rigs and five Le Tourneau Super 116E jack-up
drilling rigs.
Besides these high-end products, we had during the
year under review secured a US$200 million contract
to build a semi-submersible tender assist drilling
rig of the GustoMSC Ocean400 TD design. When
completed in 2015, it will be one of the largest and
most modern semi-submersible tender assist drilling
rigs to be delivered to the market.
These developments are very important to our team
as we further gear ourselves to secure and build more
of such drilling rigs and other high value products.
Looking back, I am pleased to say that we have
made significant progress in our core competencies.
However, we still have to continually make progress
in our R&D to further up-scale our capability to design
and construct more sophisticated and higher value
offshore products. Key areas that we have to manage
meticulously are execution and costs, to ensure that
we deliver our products on time with the highest
level of professionalism and with optimal returns.
In view of the continuing upstream investment
commitments from oil industry majors, the general
market sentiment is for the newbuild cycle for rigs to
remain resilient. They should also revive demand for
more floating production units.
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