Offshore rig construction industry is one of Singapore's few heavy industry, despite strong demand, the industry still faces challenges. The reason for this phenomenon is that counterparts from China more competitive.

Wall Street Journal recently reported that Keppel Group, Keppel Offshore & Marine (Keppel Offshore and Marine) and Sembcorp this business strategy is to come up with high-end market shift, they had specialized in producing shallow water drilling platform, and now construction can begin in the deeper and more extreme conditions of oil and gas drilling equipment. But in this market segment Korean shipping prices have been very strong position, while Chinese enterprises figure is also increasing. The two Singapore companies reported second-quarter profit fell.

The Wall Street Journal reported that Asian shipyards (mostly from South Korea, China and Singapore) controls the offshore drilling equipment market share of around 75%, until two years ago, Keppel and Sembcorp jackup drilling platform or a major supplier. Jack-up drilling rigs generally built in relatively shallow waters of the sea bed. The cost of such a platform is usually about $ 200 million. But in 2012, the two companies won only nine jackup drilling platform, new orders, and including the Dalian Shipbuilding Industry Offshore Engineering Co., Ltd. and CIMC Raffles Shipyard in China, including COSCO is won 14 orders. First seven months of this year, China has 23 orders ahead of Singapore's 17 orders. Although Singapore builders still holding long-term orders, but cheaper Chinese drilling platform for Singapore means getting new business will become increasingly difficult.

And Singapore, threatened sizeable industry. Singapore Ministry of Trade and Industry data show that last year marine engineering in Singapore's manufacturing accounted for 6.4% of total output, bringing about 190 million Singapore dollars (about 15 billion U.S. dollars) in revenue.

Chinese shipyards in 2013 received orders rig is expected to hit the biggest this year, which is mainly affected by shipping enterprises from China's shipbuilding industry overcapacity redeploy resources boost. Chinese Government proposed five-year plan to build the Bohai Bay, Yangtze River Delta and Pearl River three marine engineering equipment manufacturing base.

China's " Twelfth Five-Year Plan" goal is to marine equipment sales reached 200 billion yuan, accounting for 20% of the global market. Religare Capital Markets ASEAN head of research Vincent Fernando said that in order to achieve these objectives and to obtain technical know-how, Chinese shipyards all want to beat the competition and even sacrifice profits.

Keppel Group announced last month, the company plans in 2014 launched a new rig designs. Drilling rigs for three thousand meters water depth exploration work, the cost is almost self-elevating drilling platforms fourfold. Singapore and China in this professional field can compete with the South Korean shipyard remains to be seen.