Seatrium customers defer maintenance and repair work amid Mid-East conflict; no material impact expected
It is replenishing its order book with more than S$32 billion in pipeline deals over the next 24 months
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[SINGAPORE] Demand for Seatrium’s maintenance, repair and overhaul services (MRO) has softened amid the Middle Eastern conflict, even as the overall impact on its other operations remains limited.
Seatrium has no major Middle East-related projects in its order book, with its presence in the region limited to its subsidiary, Seatrium Offshore Technology (SOT), which provides rig kits and MRO services.
“To date, the impact of the conflict on SOT’s rig kit supply operations in the Middle East has been limited, with no customer contract cancellations or deferments,” said Seatrium in a bourse filing on Thursday (Apr 16).
“However, MRO activity has moderated as some customers in the region have temporarily paused operations and deferred MRO services.”
Still, Seatrium does not expect the softer MRO activity to materially affect the group.
The company was responding to a shareholder’s query, ahead of its annual general meeting on Apr 22, on the impact of the Middle East conflict on its regional operations, projects and delivery schedules.
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It also addressed a separate shareholder query on whether the conflict was disrupting project timelines and supply chains for deliveries of its floating production storage and offloading units and floating production units, including those for Gulf-region clients.
The group said there are currently no projects in its order book that are bound for the impacted region.
It added that a significant portion of its work is executed through its One Seatrium Global Delivery Model and geographically diversified yard network, which improves operational agility and offers resilience against regional disruptions.
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“At this juncture, supply chain impact arising from the conflict remains limited and indirect,” said Seatrium.
“In line with usual procurement risk mitigation measures, schedule buffers and early procurement strategies are in place for critical items. Key equipment for the group’s ongoing projects is also largely manufactured outside the Middle East.”
Responding to another shareholder’s query on whether higher oil prices are leading to new project enquiries, Seatrium said higher oil prices generally support capex and reinforce energy security considerations, but it is “too early to assess if this will lead to a material acceleration in new commercial opportunities”.
Such opportunities will depend on the duration and severity of the Middle Eastern supply disruption, it added.
Separately, Seatrium was also asked about its efforts to replenish its order book, which fell more than 20 per cent to S$17.8 billion as at end-FY2025. It said that it is pursuing more than S$32 billion in pipeline deals over the next 24 months across oil and gas, offshore wind, repairs and upgrades, and new energy solutions.
A shareholder also raised concerns over the wind turbine installation vessel delivery to Maesk, including its repayment timeline, interest rate and potential credit risk linked to the project’s commercial viability.
Since delivering the vessel on Feb 26, Seatrium has received payment of at least US$110 million (excluding variation orders) and started the 10-year, interest-bearing credit arrangement. The loan will be repayable through cash generated by the vessel, said the group.
Shares of Seatrium ended Friday 1.6 per cent or S$0.04 lower at S$2.42.
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