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Vantage Drilling Company Message Board

  • zalm_met_viagra zalm_met_viagra Sep 25, 2013 4:09 AM Flag

    some caution??

    Order Placement for Drill Ships on a Rapid Decline
    23 September 2013

    The global drill ship market is shrinking this year to drag down the profits of major Korean shipbuilders. The order quantity and unit cost are all declining at the same time.

    According to industry sources, Korean shipbuilders have won nine drill ship contracts since the beginning of this year, which is approximately one half of last year’s total at 17 and one-third of the volume they recorded in 2011. Daewoo Shipbuilding & Marine Engineering has won four contracts, and Samsung Heavy Industries has obtained five. The problem is that the market prospect is not bright for the rest of this year.

    Besides, the decrease in the unit cost is putting more and more pressure on the companies. The level of the price remained over US$600 million during the first half of 2013, but has dipped below US$500 million in the latter half. In particular, Samsung Heavy Industries won two drill ship contracts in July from Seadrill Draco at the price of US$1.04 billion, so the price per vessel hit a record low in the history of the local industry. “If the unit cost is around US$500 million, the margin rate is estimated to be about 5%,” said an industry source, adding, “The percentage used to be over 15% in the recent past.”

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