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SBI Offshore bags procurement contract for semi-submersible rig to be built in China

MAINBOARD-LISTED SBI Offshore has bagged a procurement contract for drilling equipment systems of a semi-submersible offshore rig to be built in China.

The rig, intended for deployment in the North Sea at a depth of up to 3,600 metres, will be the largest of its kind to be built in China to date.

SBI was appointed lead contractor by China Sunrise Group (CSG), a Guangzhou-based private shipping company which will own the proposed rig. Work on the rig is expected to commence in the first half of 2015, and be completed in 42 months.

CSG has short-listed three state-owned shipyards in China to construct the rig.

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While SBI has signed technical agreements with two of the three shipyards, it is expected to sign the last agreement by mid-January 2015.

Upon appointment by CSG, the selected shipyard is expected to enter into an engineering, procurement and commissioning agreement with SBI by the first half of 2015.

Due to the nature of the contract, SBI is unable to quantify its financial impact from this project. But it expects to recognise some initial revenue in the financial year ending Dec 31, 2015, and realise the bulk of the project revenues over FY2016 to FY2018.

Founded in 1994, SBI provides engineering, fabrication, distribution and equipment solutions to the offshore and marine industry.

Following the announcement on Monday, SBI's counter jumped 5.45 per cent, closing at S$0.29.