Singapore’s Keppel Corp (KPLM.SI), the world’s largest maker of oil rigs, posted a better-than-expected 9.4% rise in quarterly earnings as its property unit helped offset a weaker rig building market. 

The global recession last year slowed orders for rig makers and the industry has come under further pressure in the wake of BP’s (BP.L) oil spill in the Gulf of Mexico, which triggered a US government moratorium on deepwater drilling.  

 

U.S. oil services company Halliburton (HAL.N) this week reported an 83% jump in net profit, but warned the moratorium will cut earnings this year.

 

“The Gulf of Mexico oil spill has understandably caused some industry players to adopt a wait-and-see attitude on new rig orders and this has in turn impacted our orderbook,” CEO Choo Chiau Beng said in a statement. 

 

He said the company has submitted a number of bids for rig tenders by Brazil’s national oil company and he hopes to secure more orders. 

 

Keppel, which generates about two-thirds of its revenue and gross earnings from offshore and marine business, said its orderbook stood at $5 billion as of June, versus $5.8 billion in the first quarter. At the end of 2008 it had $10.8 billion of work booked. 

 

Analysts say a key near-term task for CEO Choo is to win deals from Brazilian state-owned oil explorer Petrobras (PETR4.SA). (nSGE66I026) Keppel on Wednesday announced US$124 million ($170.6 million) of new contracts in Brazil.

 

Investors also want to see the US$10 billion ($13.8 billion) company to diversify in the longer-term into environmental engineering such as wind farm projects as well as waste and water treatments, analysts have said. 

     

The conglomerate, more than one-fifth-owned by state investor Temasek (TEM.UL), posted April-June net profit of $347.3 million versus $317.3 million a year earlier. Analysts had predicted $301.5 million. 

 

Keppel has been banking on legacy orders during a five-year boom in the oil industry until 2008 and a strong performance at its property arm Keppel Land (KLAN.SI), which reported a 20% rise in second-quarter net profit. 

 

Analysts expect Keppel to report a 10% drop in 2010 net profit this year to $1.14 billion, according to Thomson Reuters I/B/E/S. 

 

Keppel competes with local rival Sembcorp Marine (SCMN.SI), the world’s second-largest rig builder, and South Korea’s Hyundai Heavy Industries Co(009540.KS) and Samsung Heavy. 

 

Hyundai Heavy more than doubled its second-quarter net profit on improved demand for ships and offshore oil and gas platforms.

 

Ahead of the results, Keppel shares had risen 6.4% this year, outperforming a 1.4% gain on the benchmark Singapore index and SembMarine’s 3.5% increase.