This makes OWEC Tower a wholly owned subsidiary, as KV Ventus had acquired 49.9 per cent of OWEC back in 2012.
OWEC Tower is a Norwegian technology firm that designs jacket foundations for offshore wind turbines and conducts engineering work and studies in connection with the jacket foundations.
According to Keppel, the cash consideration of this acquisition is being financed through internal working capital.
With reference to market conditions in the North Sea oilfields, production has continued to slide, with the low cost of oil, high production costs and high corporate taxes in the surrounding countries, hindering further investment.
One of the most productive North Sea oil fields, Brent, lent its name to the world benchmark for crude-oil prices. However, recent years have seen North Sea profit margins progressively tighten amid rising costs and high taxes, as North Sea oil fields mature. Many remaining fields are old and depleted. Newer fields are smaller, more inaccessible and require costly technology to extract.
A report by Oil & Gas UK noted that oil companies drilled only 14 exploration wells in 2014 in the British sectors of the North Sea. By comparison, approximately 70 exploration wells were drilled in the Norwegian sector, where the government offers tax incentives.
As the current oil fields are depleted, oil prices need to increase to justify the increased expense of accessing and tapping new reserves, or the energy return on energy invested (ERoRI) will be insufficient for oil & gas companies, investing in new oil & gas infrastructure.
The acquisition could represent a long term strategy by Keppel Corporation, aimed at consolidating its assets and interests in petrochemical-linked sectors like rig construction.
With peak oil being a significant long-term concern and the new advances in renewable energy, a promising sector that could see growth (leveraging on Keppel’s current capabilities) is, floating real estate such as floating solar power plants and farms.