Dec 20, 2011
GROWTH & EXPANSION IN BRAZIL WITH MILESTONE GROUND-BREAKING OF ESTALEIRO JURONG ARACRUZ
Singapore, December 20, 2011: Sembcorp Marine’s subsidiary Jurong Shipyard marked an important milestone in its growth and expansion strategy with the ground-breaking of Estaleiro Jurong Aracruz, the Group’s first overseas Integrated New Yard Facility in the state of Espirito Santo, Brazil.
The construction and development of Estaleiro Jurong Aracruz, a wholly-owned, locally incorporated new Brazilian shipyard, is in line with Sembcorp Marine's global hub strategy to further strengthen its foothold in Brazil. The country was chosen as a strategic growth hub due to its recent oil and gas discoveries in the offshore giant pre-salt fields, Petrobras' huge Investment Plan for its Exploration and Production sector, the requirement to have Brazilian local content in its offshore platforms projects as well as its close proximity to the oil and gas fields of the Atlantic, Gulf of Mexico and West African sectors.
The ground-breaking ceremony, held on 19 December 2011 in Brazil to mark the commencement of Estaleiro Jurong Aracruz’ construction works, was officiated by the Governor of Espirito Santo, His Excellency Renato Casagrande. This significant occasion was also witnessed by Sembcorp Marine’s Chairman Mr Goh Geok Ling as well as Directors Tan Sri Mohd Hassan Marican, Mr Lim Ah Doo and Mr Ron Foo.
Mr Wong Weng Sun, President and CEO of Sembcorp Marine and Managing Director of Jurong Shipyard, who was also present at the ground-breaking ceremony, said "We are here at the right place and right time. The ground-breaking for the development of Estaleiro Jurong Aracruz will provide a clear signal to the Brazilian Oil and Gas market that Sembcorp Marine is completely committed to continue its services to them, in their country. With our two decades of experience servicing the Brazilian Oil and Gas Industries, Estaleiro Jurong Aracruz will substantially strengthen our ability to meet our major clients' needs especially in developing the recently discovered giant pre-salt oil and gas reservoirs. The Brazilian Oil and Gas market considers us a major player there. We have successfully completed a total of 18 oil and gas exploration, production and storage platforms for Brazilian oilfields. These platforms contribute approximately half of Brazil's daily oil output."
“This extensive track record and experience of operating in Brazil will provide strong confidence to the market that Estaleiro Jurong Aracruz will be able to continue our tradition in the construction of drilling rigs, FPSO integration, topside modules fabrication, and the repair and upgrading of ships and rigs."
Estaleiro Jurong Aracruz has successfully obtained the Environmental License, a pre-requisite for the commencement of shipyard construction in Brazil.
Phases of Construction
The Integrated New Brazilian Yard Facility will be constructed on an 82.5 hectare freehold site which was acquired in 2010. The shipyard will be developed over a period of three years and in stages with full completion scheduled for end 2014.
Planned shipyard facilities include a 120m x 380m drydock, a one-kilometer berthing quay as well as ancillary piping facilities and steel fabrication workshops. Well-positioned to serve Brazil’s vibrant offshore and marine sector, Estaleiro Jurong Aracruz will have capabilities to undertake construction of drillships, semi-submersible and jackup rigs, platforms, supply vessels, the integration of FPSOs and topside modules fabrication, in addition to the traditional activities of drilling rig repairs, ship repairs and modification/upgrade works.
Funding of Development & Financial Impact
The preliminary projection of the development costs of the Integrated New Brazilian Yard Facility is estimated to be around US$550 million. It will be funded through a combination of debt and internal funds generated from operations of existing shipyards.
This is a long-term investment project for the Sembcorp Marine Group. The investment is in line with Sembcorp Marine’s global hub strategy to strengthen and partner Brazil in its long-term sustainable growth. It will also cater to oil and gas centres of the Atlantic, Gulf of Mexico and West African regions. It is not expected to have any material impact on the net tangible assets and earnings per share of the Company for the year ending December 31, 2011.
Barring unforeseen circumstances, the Company expects positive contributions to its earnings when the New Brazilian Yard Facility becomes operational.
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