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Stock Markets July 27, 2026 11:37 AM

Apollo to Commit $1.5 Billion to Keppel Offshore Fund as Part of Rig Divestment Plan

Deal transfers six operational rigs to a new private vehicle, unlocking cash and expanding funds under management while Keppel records a near-term accounting loss

By Avery Klein
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Apollo Global Management will take a $1.5 billion stake in a new private fund set up by Singapore-based Keppel to hold six operational oil rigs. The transaction is a component of Keppel’s broader plan to divest 10 rigs held by Rigco Holding Pte for nearly S$3.7 billion and is intended to free capital for reinvestment, lower debt and return value to shareholders. Keppel expects immediate cash inflows this year and to add materially to its funds under management, but will record a S$92 million accounting loss in the first-half results.

Apollo to Commit $1.5 Billion to Keppel Offshore Fund as Part of Rig Divestment Plan
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Key Points

  • Apollo will invest $1.5 billion in Keppel’s new private fund that will hold six operational oil rigs, giving Apollo exposure to the regional offshore energy market.
  • The transaction is part of Keppel’s broader plan to divest 10 rigs held by Rigco Holding Pte for nearly S$3.7 billion, aimed at freeing capital for reinvestment, reducing debt and rewarding shareholders. The six-rig sale is expected to bring Keppel $478 million in cash this year.
  • Keppel expects the divestment to add about S$3.9 billion to its funds under management and plans to transfer four additional rigs currently under construction into the new fund between 2027 and 2028; the overall transaction is expected to produce $988 million in cash proceeds.

Apollo Global Management has committed $1.5 billion to a newly formed private fund established by Singapore’s Keppel to acquire six operational offshore oil rigs, the companies announced on Monday.

Keppel described the arrangement as a way to monetise assets it deems non-core and to free up capital for redeployment. For Apollo, the investment provides entry into the regional offshore energy sector, which Keppel and Apollo say is experiencing high utilisation and exhibits long-term demand characteristics.

The transaction forms part of a larger initiative by Keppel to divest 10 oil rigs currently held through its indirect subsidiary, Rigco Holding Pte, in a process valued at nearly S$3.7 billion (about $2.87 billion). Keppel said the wider divestment program is designed to generate funds for new investments, help pare down debt and enable returns to shareholders.

Under the initial tranche of the plan, Keppel expects to receive $478 million in cash this year from the sale of the six operational rigs to the newly created Keppel Offshore Fund for S$1.2 billion. Keppel, the Singapore-based fund manager, will contribute half of its stake in the private fund via an indirect unit.

Keppel also said the sale of the six rigs will bolster its funds under management by about S$3.9 billion. In addition, the company intends to transfer four further rigs that are currently under construction into the new fund in the 2027 to 2028 window. Keppel estimates the overall transaction will generate $988 million in cash proceeds for the company.

Keppel added that it will record an accounting loss of S$92 million tied to the divestment of the six operational rigs in its first-half results, which are scheduled for July 30. The announcement included the exchange rate used for conversions: ($1 = 1.2907 Singapore dollars).

Key data points

  • Apollo investment in new private fund: $1.5 billion.
  • Keppel divestment program value for 10 rigs: nearly S$3.7 billion (~$2.87 billion).
  • Cash expected this year from six-rig sale: $478 million (sale price S$1.2 billion).
  • Accounting loss to be booked in H1 results: S$92 million.

Risks

  • Keppel will record a S$92 million accounting loss on the divestment of the six operational rigs in its first-half results, which may affect reported profitability for the period - impacts financial sector and corporate reporting metrics.
  • The planned transfer of four additional rigs now under construction is scheduled for 2027 to 2028, introducing timing and execution uncertainty around the full divestment program - impacts offshore engineering and capital markets tied to those assets.
  • Projected cash proceeds and additions to funds under management are described as expected, indicating they are contingent on completion of the transactions and thus subject to deal execution risk - impacts Keppel’s balance sheet and asset management business.

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