0.945 close. closer to target of 0.80
ooh... i was wrong it broke through the bollinger bands and went downwards... i tot it would go up
Faith for improving? Think they need some action.. luckily sold at 1.50
Sell now. this will soon be a 80 cents share.
HONG KONG/SEOUL, July 13 (Reuters) - China is emerging as a
strong contender to the traditional offshore oil rig
manufacturing powerhouses of Singapore and South Korea as
shipyards such as COSCO Corp fight for a bigger market share in
a deepwater exploration boom.
China started making jack-up rigs for shallow-water drilling
and semi-submersibles for deepwater operations about seven years
ago. In that short span of time, industry data shows it managed
to secure a fifth of the $72 billion orders placed, tempting
customers with aggressive pricing.
China also topped the annual orders lists at least twice
during that period. In 2009, it outpaced Singapore,
traditionally the dominant producer of jack-ups, and in 2006 and
2011, ousted South Korea on semi-submersibles.
" Over time there is no reason why Chinese yards -- the good
yards -- could not be competitive internationally," Scott Kerr,
chief executive officer of Norwegian oil service company Sevan
Drilling, told Reuters.
Sevan has taken delivery of two ultra-deepwater rigs worth
more than $1 billion from COSCO and has ordered
another two such rigs from the shipbuilder, which operates seven
yards in China, for delivery in 2013 and 2014.
The Norwegian oil service company bypassed shipyards in
South Korea and Singapore partly because their yards were almost
full and the Chinese offered a competitive price, Kerr said.
The better pricing had its downside. COSCO dragged its feet
on the delivery of the first rig, the world's first cylindrical
drilling unit, as the yard initially lacked some of the know-how
to build and assemble sophisticated offshore equipment, he said.
With quality and delivery reliability a persistent concern,
China remains a distant No. 3 among rig builders. In the first
half of 2012, China secured just three orders out of the 29
placed during the period, versus 11 for South Korea and six for
Singapore, data from Credit Suisse shows.
China's poorer showing so far this year is partly because
most of the orders were for deepwater rigs, where Singapore and
Korean yards still have a competitive edge. In the second half
of last year, 14 out of 26 rigs ordered were jack-ups. China has
had more success winning orders for that rig type.
But with newly acquired expertise, foreign technology and
cheaper prices, Beijing could become a major offshore oil
equipment making hub in 10 years, just as Singapore and South
Korea supplanted shipyards in the United States and Europe in
the 1990s, industry watchers say.
Strong financial backing from Chinese state banks also helps
make payment terms attractive. Clients ordering from China could
put down a fraction of the price as downpayment, sometimes as
little as one percent.
Chinese yards garnered nine out of the 26 orders placed for
all rig types in the second half of last year, industry data
shows. That put China ahead of South Korean shipyards, which
received eight contracts, and Singapore, which got only five.
Competitors have taken notice.
" I am in Singapore. I talk to vessel builders all the time.
Singaporeans are very worried about the Chinese shipyards," said
Jason Waldie, director of energy consultancy Douglas-Westwood.
" The Koreans are also worried."
AGGRESSIVE BIDDING, DIVERSIFYING
China expects to boost its share of the global offshore
energy equipment industry to 20 percent by 2015 and to 35
percent by 2020 from under 8 percent in 2011, the official
Xinhua news agency said. Chinese yards received $4.7 billion in
orders last year, according to Xinhua.
The global economic slowdown has slashed demand for bulk
cargo and container vessels. That drove Chinese shipbuilders
like COSCO, China State Shipbuilding Corp (CSSC), China
Merchants Heavy, China Shipbuilding Industry Corp (CSIC), Yantai
CIMC Raffles and Offshore Oil Engineering Corp to
start filling their idled yards with offshore projects.
CSSC is the state parent of China CSSC Holdings and
Guangzhou Shipyard . CSIC is the parent of
China Shipbuilding Industry Co Ltd.
" There is an excess of shipbuilding capacity in China. To
fill their yard capacity, definitely many Chinese yards will
have to be more aggressive in the offshore equipment market,"
said Gerald Wong, an analyst at Credit Suisse in Singapore.
More than 28 Chinese yards, including Shanghai Zhenhua Heavy
Industries Co, have announced expansion plans to
take on offshore projects, he said.
Investors in Singapore and Korean builders such as Sembcorp
Marine, Keppel Corp, Samsung Heavy
, Hyundai Heavy and Daewoo Shipbuilding &
Marine Engineering Co appear unfazed by the Chinese.
Their share prices have been resilient this year and are
backed by a series of 'buy' or 'strong buy' ratings from
securities houses, Thomson Reuters data shows, outperforming
benchmark indices and their Chinese peers.
Chinese shipyards like COSCO, Yangzijiang and
Guangzhou Shipyard have seen steep declines in their shares in
the past year as most of them are not moving out of commercial
vessels, a languishing sector, quickly enough.
Their bidding for offshore equipment orders with low prices
and attractive terms has also hurt profit margins.
Douglas-Westwood's Waldie said Chinese yards can build equipment
that is up to 20 percent cheaper than the output of their
overseas counterparts.
" They are a threat. They are coming fast. They will take
over or be as competitive," Sevan's Kerr said of Chinese yards.
" For the Koreans or the Singaporeans to say that's not going to
happen, they are kidding themselves."
THE GAP
The recent deployment of China's first home-made
ultra-deepwater rig " Haiyang Shiyou 981" suggests the country
has developed the capability of producing internationally
competitive and sophisticated offshore equipment, experts say.
Fitted with the latest technology of Houston-based naval and
marine engineering company Friede Goldman (F& G) acquired by
China in 2010, the $1 billion rig owned by Chinese National
Offshore Oil Corp (CNOOC) was launched amid much fanfare in May
and is to operate in waters as deep as 3,000 metres.
Executives at South Korean rig makers shrugged off concerns
about China, saying their yards producing deepwater rigs will
continue to rule the roost for a long time.
South Korea makes no jack-ups but leads in production of
increasingly popular mobile deepwater rigs known as drillships,
garnering 87 percent of orders valued at $59.2 billion placed
between 2005 and 2011, industry data show.
" We are far ahead of the Chinese," said Ahn Ik-chul, head of
Daewoo Shipbuilding's public relations, citing the solid track
record of Korean yards in delivery reliability.
By contrast, Yantai Raffles, now a unit of China
International Marine Containers (Group) Ltd
, had suffered a series of delivery delays
in recent years that irked customers including BP and
China Oilfield Services Ltd.
Big customers still turn to Singapore or Korean yards for
quality. Denmark's Maersk Drilling, a unit of A.P. Moller-Maersk
, said last week it planned to pay up to $8 billion
for seven new oil rigs by 2017.
" We expect the new rigs will also be built in Singapore and
South Korea. That's where the quality is," Maersk Drilling's CEO
Claus Hemmingsen told Reuters.
But industry experts say China may catch up quickly as the
gap between Chinese yards and their South Korean and Singapore
rivals is probably more about project operating and management
expertise rather than technology.
None of the yards in Asia makes the high-tech parts used in
deepwater rigs, such as hydraulic and drilling control systems.
Those are all made by Western firms like Siemens,
Aker Solutions and Cameron.
" It is not so much a technology gap. It is a management
gap," Kerr said. " China can be just as competitive in building
those (rigs) as anyone else."
lol....okie....i doubt so it will break up......sentimental for this counter too weak...
relax bro...i also doubt cosco will breakout in near future....mkt still weak...till europe clear up their mess....i guess $4 in sight maybe in 4 years time...
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