(WO) — Singapore-based Keppel Ltd. will progressively monetize up to 10 legacy offshore rigs through a newly established private investment vehicle, Keppel Offshore Fund (KOF), in a move that reflects strengthening fundamentals in the global offshore drilling market.
Under the agreement, funds, accounts and entities managed by Apollo Global Management will invest US$1.5 billion in KOF, which will acquire six operational offshore rigs from Keppel in 2026 for approximately S$1.2 billion (US$925 million). Keppel also plans to complete and potentially divest four additional rigs to the fund between 2027 and 2028, subject to certain conditions.
The transaction is expected to contribute approximately S$1.2 billion (US$925 million) toward Keppel’s 2026 asset monetization program, with the potential to generate an additional US$988 million in cash proceeds if the remaining four rigs are transferred to the fund. Keppel said the transaction will also increase its funds under management by approximately S$3.9 billion (US$3.0 billion) while allowing the company to retain an ownership stake in the offshore rig portfolio.
Keppel CEO Loh Chin Hua said the transaction establishes a pathway to monetize the company’s legacy rig assets while maintaining exposure to the offshore drilling market through its investment in the fund.
The company said the timing reflects improving offshore rig market fundamentals, with high fleet utilization and structural supply constraints supporting demand for modern drilling rigs. After nearly a decade of limited newbuild activity, the global offshore rig fleet continues to age, while higher construction costs, longer lead times and tighter financing conditions are expected to limit new supply.
Keppel said these market conditions are expected to support long-term demand for high-specification offshore rigs.
Completion of the transaction remains subject to customary closing conditions, including regulatory approvals. Keppel said it will continue evaluating monetization options for its remaining three legacy rigs, which are not included in the current transaction.
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