Sete Brasil’s financial crisis, linked to the broader corruption scandal enveloping state oil firm Petrobras, has reverberated as far as Singapore with Keppel Corporation acknowledging on Thursday the potentially damaging impact on its business.
In its unaudited annual report it explains that the problems facing Sete – an investment company that supplies oil rigs – have cast serious doubts on several huge contracts with Keppel Offshore & Marine to build semi-submersibles.
Sete is one of Keppel’s biggest customers and it is believed to be teetering on the verge of bankruptcy. But Keppel has not received payment for the bulk of the approximately $7bn in orders.
In its report Keppel admits it “has not been spared from this storm” of the fallout from Brazil’s corruption scandal. But it says it was able to take some mitigating actions as it saw the clouds on the horizon and slowed down the pace of construction on the rigs as payments from Sete stalled around a year ago.
Keppel says only two of the six contracted rigs were so advanced in progress as to have gone to the company’s yard in Brazil. All other work on the contracted rigs has been suspended since the end of 2015.
So far, Keppel says, it has received $1.3bn of the payments