STX Offshore & Shipbuilding, the world's No.4 shipbuilder, is targeting about $2 billion in new orders for offshore vessels and plants this year, more than double the amount recorded last year, a senior executive said on Wednesday.
The South Korean company aimed to maintain or raise the target for offshore orders next year and expects to win orders from oil and gas projects in Brazil, Russia and Africa, Y.H. Chung, chief operating officer in charge of offshore business, told Reuters in an interview on Wednesday.
Chung said risks from the global economy and the still-nervous financial markets remained, but the offshore industry was likely to see a faster recovery than the commercial shipbuilding business in 2010, because of growing demand for energy development.
"We are getting many more inquiries compared with late last year or early this year ... we have many deals to win in our yards in Brazil, China and South Korea."
Global oil majors and energy developers have been slow to push for major projects since the financial crisis, but Chung said the momentum would revive when financing conditions improve and oil prices reach $80 per barrel.
"Our clients say $70-$80 per barrel is an appropriate price level for drilling and production," he said.
STX offers Panamax-sized drillships that are smaller than rival vessels but with the same drilling performance, which Chung expects to become popular next year among oil developers seeking to cut costs in the difficult market.
The relatively new but fast-growing offshore business is set to become a lynchpin for STX Offshore, which competes with bigger home players Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries as well as emerging Chinese rivals.
South Korea dominates the market for offshore energy-development vessels and plants, such as drillships and floating production storage and offloading units (FPSO), more lucrative than commercial shipbuilding and less competitive due to technology requirements.
"In traditional shipbuilding, China is expected to catch up quickly and take the bulk of the business, but we can enjoy a technological lead in offshore business for up to 10-15 years," Chung said.
STX hopes to win future drillship orders from Brazil's Petrobras, using its Brazil shipyard as a base, and is also working to secure orders for larger projects such as FPSO and liquefied natural gas (LNG) FPSO, Chung said.
STX is starting with FPSO hull-making but "We hope to build enough reputation and experience to win a full FPSO unit order around the end of next year," Chung added.
STX Offshore and its affiliate in 2008 bought Europe's biggest shipbuilder Aker Yards, now renamed STX Europe. The deal brought STX into the high-end cruise and ferry market and gave it strategic locations to pursue deals in Brazil and Russia.
Its parent, STX Group, also runs the world's No.5 dry bulk carrier STX Pan Ocean Co Ltd and ship engine maker STX Engine Co Ltd, and plans to expand into offshore energy development and shipping business.
The South Korean company aimed to maintain or raise the target for offshore orders next year and expects to win orders from oil and gas projects in Brazil, Russia and Africa, Y.H. Chung, chief operating officer in charge of offshore business, told Reuters in an interview on Wednesday.
Chung said risks from the global economy and the still-nervous financial markets remained, but the offshore industry was likely to see a faster recovery than the commercial shipbuilding business in 2010, because of growing demand for energy development.
"We are getting many more inquiries compared with late last year or early this year ... we have many deals to win in our yards in Brazil, China and South Korea."
Global oil majors and energy developers have been slow to push for major projects since the financial crisis, but Chung said the momentum would revive when financing conditions improve and oil prices reach $80 per barrel.
"Our clients say $70-$80 per barrel is an appropriate price level for drilling and production," he said.
STX offers Panamax-sized drillships that are smaller than rival vessels but with the same drilling performance, which Chung expects to become popular next year among oil developers seeking to cut costs in the difficult market.
The relatively new but fast-growing offshore business is set to become a lynchpin for STX Offshore, which competes with bigger home players Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries as well as emerging Chinese rivals.
South Korea dominates the market for offshore energy-development vessels and plants, such as drillships and floating production storage and offloading units (FPSO), more lucrative than commercial shipbuilding and less competitive due to technology requirements.
"In traditional shipbuilding, China is expected to catch up quickly and take the bulk of the business, but we can enjoy a technological lead in offshore business for up to 10-15 years," Chung said.
STX hopes to win future drillship orders from Brazil's Petrobras, using its Brazil shipyard as a base, and is also working to secure orders for larger projects such as FPSO and liquefied natural gas (LNG) FPSO, Chung said.
STX is starting with FPSO hull-making but "We hope to build enough reputation and experience to win a full FPSO unit order around the end of next year," Chung added.
STX Offshore and its affiliate in 2008 bought Europe's biggest shipbuilder Aker Yards, now renamed STX Europe. The deal brought STX into the high-end cruise and ferry market and gave it strategic locations to pursue deals in Brazil and Russia.
Its parent, STX Group, also runs the world's No.5 dry bulk carrier STX Pan Ocean Co Ltd and ship engine maker STX Engine Co Ltd, and plans to expand into offshore energy development and shipping business.