July 30, 2021

10 thoughts on “Rolf’s Thoughts – Sembcorp Marine and Keppel O&M’s Merger!

  1. Hi Rolf,

    Like u, I wondered if I should leave a comment, lol, since u are the guru and I am just speculating .lol buy nonetheless…

    When I hold sembmarine due the gift of free shares by SCI, I sold it off at 15 cents.

    There and then, I remember there were talks about a merger and restructuring. The reasons I felt was while "dirty" oil industry will be around for a long time, I believe the pie will be shrinking especially at the upstream , and particularly at the deep water exploration part. I remember reading UK already stop exploration of its basins …

    So having one company chasing after a smaller pie and building up clean green energy solutions does seem like a good mov from a national perspective.

    I do hope the redundancy of workers is not so serious.

    Regarding the cut cut cut. We already cut chartered semiconductor and now we are so happy that it is coming back (different fostered parent) not sure if the child has sticked with us, will the child be stronger now with good chips?

    NOL never get to see the crazy freight rate of today again.

    1. Hey SI, tks for the comments. In general I think it is a good move and necessary as well.

      Deep water exploration is very costly and risky. When oil is low price, normally cost-rewards analysis is not as favourable.

      The world is going for zero-carbon emission and hence O&G will be gradually switching over to renewables.

      As for Chartered, it is still doing very badly now, since I have few friends inside.

      The problem is innovation, size of chips they are in, and management, not all about industry per se.

      As for NOL, marine is cyclic! Rates are like TV, getting cheaper. However, Samsung do innovates and get into phones and others to keep the overall company successful and keep all the workers.

  2. Hi Rolf,

    Good to read a blog post about Keppel and SCM from an industry insider like you.

    When a company has been in decline for a long time like SCM, a big worry is experienced staff leaving the company with no competent fresh blood taking over. If this happens, the expertise that the company has built up over the decades will be gone. The track record that the company can boast about becomes irrelevant. The welding problems you mentioned at Equinor is an indication that this is happening to SCM. I have no direct experience in this industry. Is welding something basic and should never have been a problem for experienced players?

    With the recent surge in oil price, your industry is doing well again. All the best!

    1. Hi Hyom, nice to hear from you again.

      All the best to you as well.

      You are right! Track records are really “nothing to speak of” if there are no competent people anymore.

      Welding is quite a basic expertise in shipbuilding. However, different vessels have different requirements. Competent welding personnel is also very difficult to get in Singapore nowadays. And welding procedures can be project-specific and complex with welders not familiar with it.

      What I know is that for the Equinor Johan Castberg, it is also a NEWBUILD FPSO (Floating Production Storage Offload) or FPU (… FP unit). For FPU, most of Singapore’s SCM or KOM experiences are from CONVERSION (from tankers) with few track records on newbuilt, although SCM did build one for Total Alisa in recent years.

      The report also states that SCM use different yards for production, and there can be issues when it is finally integrated, and project management is very complex also.

      And dealings direct with Oil companies requires a lot of documentations and adaptability to their terms, and hence if you have no experience with the particular Oil contractor, risk is enormous.

      North Sea requirements are also different. Also different project/oil field, different oil companies also have different requirements.

      The surge in oil price does not help me (or my company) too much. I hope so though. Hahaha…

    2. Hi Rolf,

      Thank you for replying and sharing your industry knowledge.

      I guess your oil company is not upstream enough to enjoy the rise in oil price. This is not a bad thing as it means higher chance to survive when oil price is down. .

      You have been a prosperous survivor so far 🙂

  3. Rolf,

    I'm a cheerleader of:

    People first
    Then business
    Then KPIs

    Finally someone writes about the people aspect of this merger!

    My experience with the SAF Boys School and seeing how my "redundant" sergeants during NS were let go left an indelible impression.

    Funny how when O&M was the flavour of the moment, any new contracts secured was what propelled Keppel to new highs.

    Now? I can't wait to get you off my books! You are dragging me down! Begone!

    As for electronics, someone in big daddy's team asked the same question you did.

    Are there better flavour of the moment industries than electronics?

    We got the answers 😉

    1. Hi SMOL,

      I am with you for People first, business then KPIs. Although when business is difficult, it is HARD.

      This is a very European concept that really emphasise a lot more on human rights compared to the rest of the world. Nonetheless, even for them, it is getting worst off in terms benefits because of the difficulty of the business. This is the reality of the world.

      Who in big daddy’s team ask the same question. Curious?

      🙂

      Have a pleasant Sunday ahead.

    2. Rolf,

      Super Sunday to you too!

      I was speaking rhetorically. In contrast to Hong Kong and Taiwan, our model is top down heavy.

      Cannot put all our eggs into electronics. It's so cyclical!

      Let's see. Are there better sectors than electronics?

      How about petrochemicals? Done!

      Big pharma and bioscience got future? Spare no expense!

      Shipping sunset? Divest. Easy!

      Aerospace good, better, best? Money not a problem. We HODL!

      It's strategic!

      Wait. I think NOL heard that before…

    3. Agree with you. Just one thing to add is that Finance will forever be strong, especially Fintech now. End of the day, SG is still a place where most rich and wealthy park their $$$

    4. Switzerland of the East. Check!

      Remove GST for gold to encourage hoarding of physical gold in Singapore vaults. Check!

      Make it easier for Fintech talents to come to Singapore. Check!

      Welcome the rich and wealthy!

      Don't need to be physically here. We know you citizen of the world. Just setup your family office here can oredi!

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