Keppel Corp
File photo of Keppel FELS employees standing amongst jackup rigs at their shipyard in Singapore. Reuters

World's biggest oil rig maker Keppel Corp said it cut 10,600 jobs last year and halted functioning of two overseas shipyards to survive the industry slump that followed a downward spiral in oil prices. While announcing the Q4 results the embattled company said it is cutting 2,620 jbs at its offshore and marine division.

Keppel Corp said 35 percent of the workforce of the Offshore and Marine (O&M) division was laid off in 2016. The Singapore-based rig builder said the downturn in oil and gas exploration that stemmed from a global oil price slump since 2014 was responsbile for the job restructuring.

Keppel Corp chief executive Loh Chin Hua also said that three shipyards in Singapore are also in the process of being closed as the "challenging conditions" prevail, according to Channel News Asia. Though a landmark deal between oil cartel members led by Saudi Arabia and non-OPEC countries such as Russia to cut production came into effect on 1 January, the conditions have not improved much, Loh said.

He further explained that the agreed production cuts were aimed to overcome a global supply glut, which sent prices spiral downwards. Prices slumped to near 13-year lows of below $30 in February 2016, however it recovered to current levels of more than $50.

Keppel Corp, which also does businesses in property and infrastructure, said its 2016 net profit came in at S$784 million (US$552 million) which is 49 percent lower than the previous year. The company believes this is an outcome of lower contributions from the O&M division. Full-year net profit for the affected division plunged 94 percent to S$29 million after orders for oil drilling rigs gradually diminished.

The chief executive, however, said that the company is planning to invest in research and development despite the troubles. It is also planning to take up measures such as altering the technology they have developed in the offshore industry for other uses. "What we are going through is a very long harsh winter...It's not business as usual," said Loh, as reported.