Industry News - Asian Oil & Gas Reports - Asian rig boom broadensAsian rig boom broadens
from: Asian Oil & Gas
by: John Mueller
Thursday, August 24, 2006
As the rush to secure
offshore drilling rigs and
floating production units
continues unabated,
shipyards in East Asia are
turning their attention to
this lucrative sector. John
Mueller reports.
The two major shipyard groups in
Singapore, Keppel Corporation and
SembCorp Marine, are seeing more
competition for their specialty in
premium jackups, now cornering about
75% of the global market, semisubmersible
drilling rigs and the floating
production storage and offtake (FPSO)
vessel conversion and newbuild business.
The market for these rigs is seen as
remaining strong for several more years
by the rig builders, who are generally
confident that oil prices will be
maintained at least at current levels. This
market confidence is further bolstered by
the observation that over three quarters of
drilling rigs in use will be around 30 years
old by 2012. Backing this up is the estimate
that the worldwide number of drilling rigs
under construction comprising jackups,
semi-submersibles and drillships is in
excess of 90, and rising.
Further fuelling demand and escalating
costs are buyers, most notably Norwegian
investors, who are speculatively selling
rigs into a market short of drilling units
for considerable profit.
To meet industry needs, shipyards are
seeking additional fabrication facilities
and firming up alliances with other
yards.
Although Singapore's yards have
proven and well received proprietary rig
designs and arguably still retain a
decided edge in experience and
craftsmanship, more work is going to
rival shipyards in East Asia, with South
Korea and China building ever larger and
more sophisticated drilling and
production units.
Singapore
Keppel: Keppel O&M, through Keppel
Shipyard and Keppel Fels (KFels), has
garnered a broad spectrum of projects in
the period April through June of this
year, ranging from jackups and newbuild
and upgraded semi-submersibles to FPSO
conversions.
AP Møller-Mærsk has awarded KFels a
contract to build a repeat ultra-deepwater
semi-submersible drilling rig for $263
million, the fourth for the company. The
semi, built to the DSS-21 design, codeveloped
by Keppel's Deepwater
Technology Group (DTG) and able to
operate in a 10,000ft water depth, will be
delivered 1Q 2010.
KFels and Keppel Verolme in the
Netherlands, have each clinched a
contract from Transocean for upgrading
of a Sedco 700-series semi-submersible
drilling rig for a total of $140 million for
completion in 2Q and 3Q 2007, respectively.
Diamond Offshore Drilling is to have
the fifth generation Victory Class semisubmersible
Ocean Monarch drilling rig
upgraded by KFels to operate in water
depths up to 10,000ft in a moored
configuration for $102 million. The rig is
to be operational in 4Q 2008.
Great Eastern Shipping Company of
India has ordered a fourth KFels B Class
jackup drilling rig, valued at $182 million,
scheduled for completion in 4Q 2009.
Mercator Lines is also to have a KFels B
Class jackup drilling unit fabricated,
their first order, at $180 million, to be
delivered in 1Q 2009. The KFels Class B
design can drill to 30,000ft in water depths
up to 350ft.
Keppel Shipyard and Keppel Verolme
have secured contracts worth around
$81 million for the conversion of the
VLCC Capella to the 1.6mmbo storage
FPSO Mondo for SBM and the repair of
the FPSO Terra Nova. The Mondo,
designed to process 100,000 bopd, is
expected to be completed in 3Q 2007.
The VLCC Ellen Maersk is to be
converted by Keppel Shipyard to a
1.9mmbo storage capacity FPSO for
Maersk Contractors for approximately
$61 million. Arriving early 2007,
completion is scheduled for early 2008.
The FPSO, capable of processing 120,000
bop/d and 100mmcf/d of gas, will be
leased to Woodside Energy for a sevenyear
deployment in the Vincent field,
Western Australia.
To cope with Keppel's burgeoning
workload, KFels has acquired additional
facilities.
In Indonesia, a joint venture has been
formed with Bintan Offshore Fabricators
in order to establish a fabrication site
costing about $4 million on the southeast
coast of Bintan Island, located just
southeast of Singapore.
In Singapore, a site has been leased by
Keppel O&M in Jurong for 12 years to
carry out fabrication work for
newbuilding projects secured by the
company as well as for the mooring and
repair of rigs. Occupying 9ha, the facility
is to be ready in the 3Q of this year.
In the Philippines, Keppel-owned
shipyards in Batangas, Cebu and Subic
are being readied for rig building.
SembCorp Marine: This shipyard
group continues to receive work for its
Sembawang Shipyard (SSPL), Jurong
Shipyard (JSL) and PPL Shipyard
facilities, adding ten new contracts for
drilling rigs and floating production units
through the first half of 2006 and
extending the group's reach in China.
SSPL alone has a total order book of 20
projects, with a strong focus on FPSOs.
The ULCC BW Enterprise is being
converted by SSPL to an FPSO for
Bergesen Worldwide for $56 million. The
vessel will be able to process 200,000bop/d
and 120mmscf/d of gas when ready in 4Q
2006.
The FPSO Brotojoyo $35 million tanker
conversion has been undertaken by SSPL
for PT Berlian Laju Tbk. The first such
vessel privately owned by an Indonesian
company, the Brotojoyo, with a crude oil
storage capacity of 250,000 barrels, will be
moored in the Salawati oil field, offshore
West Papua, Indonesia
SSPL also refurbished and upgraded
the Transocean drillship Discoverer 534.
JSL has signed a letter of intent with
PetroMena of Norway to build a second
6th generation Friede & Goldman Ex-D
design ultra-deepwater semi-submersible
drilling rig for $480 million. The semi,
capable of operating in 3000m of water, is
to be delivered in 4Q 2009.
JSL also has an agreement with Noble
Drilling to undertake conversion and
outfitting of two of its semisubmersible
hulls, Noble Danny Adkins and Noble
Bingo 9000 Rig 4, with first delivery by 1Q
2009.
Aker Floating Production has
concluded an agreement with JSL for the
repair, upgrade and conversion work for
the first two Aker Smart FPSO designs
based on the sister vessels TT Polar
Alaska and TT Polar California, the work
to begin in 2007 and complete end 1Q 2008.
PPL is to construct two Baker Marine
Pacific Class 375 jackups, one for Awilco
Offshore ASA of Norway for about $137
million, deliverable in 2Q 2008, and a
second for JackInvest I for $166 million, to
be completed by 4Q 2008.
Increasing its scope in China,
SembCorp Marine has signed a
conditional agreement with Seletar
Investments to acquire its entire equity
interest in Cosco Corporation
(Singapore), bringing its holding to
8.17%. SembCorp Marine and Cosco have
respective 30:51 percent equity stakes in
the Cosco Shipyard Group in China.
Cosco Corporation also has a further
direct equity interest in China's Nantong
(50%) and Dalian (39%) shipyards.
Malaysia
Malaysia Marine & Heavy
Engineering (MMHE), located on the
southern tip of Peninsular Malaysia, has
taken an order from SeaDrill for a new
self-erecting tender rig, the T-11. The
SETR drilling assist barge is valued at
$100 million.
MMHE is also engaged in the
fabrication of completion and production
facilities for the deepwater Kikeh field,
offshore Sabah, East Malaysia. This work
encompasses fabrication of a truss spar
hull and topsides and conversion of a
VLCC to an FPSO, plus construction of
the turret.
Current MMHE yard activity also
includes the Abu Cluster FSO for
Petronas and the Cendor FSO for
Petrofac.
South Korea
Samsung Heavy Industries Company
(SHI), Daewoo Shipbuilding & Marine
Engineering Company (DSME) and
Hyundai Heavy Industries Company
(HHI) in South Korea have received
orders for seven large drillings rigs and
two FPSOs.
SHI has won four firm drilling rig
contracts in the first six months of 2006,
all from Scandinavian clients, three of
them very large drillships.
Stena Offshore of Sweden and Ferncliff
Drilling of Norway have each placed an
order for a $550 million drillship, reputed
to be the world's largest such rigs at 222m
in length and 97,000 dwt with a capability
to drill to 11,000m. Completion dates are
mid-2008 and 1Q 2009, respectively.
Mosvold Shipping of Norway has also
ordered a drillship with an 11,000m
drilling depth capability, to be delivered
by end 2Q 2008.
Eastern Drilling ASA of Norway has
exercised an option to have the West E-Drill
II semisubmersible constructed at a
total cost of $578 million, for completion
in 3Q 2008.
As of 2Q 2006, SHI has orders for 11
drillships out of a global total of 18.
SHI is also reported to have secured a
deal to supply a $445 million FPSO vessel
to an undisclosed Asian client.
DSME has received fabrication awards
for one drillship and two semisubmersibles
in the first half of 2006.
Transocean has awarded a $467 million
contract for the construction of an
enhanced Enterprise-class drillship
capable of drilling up to 40,000ft deep in
water depths of 12,000ft. To be named the
Discoverer Clear Leader and delivered in
2Q 2009, it is the first drillship order for
DSME from Transocean.
Two harsh environment ultradeepwater
semi-submersible drilling rigs
have been ordered, one for Odfjell Invest
for delivery in 4Q 2008, and the other for
SeaDrill based on the GVA 7500 design at
a cost of $500 million, to be delivered in
3Q 2008.
HHI has an order from BP Angola for a
newbuild FPSO costing $350 million, to be
used in deepwater Angola in 2006. Named
the Plutonio, the FPSO will store 2mmbo
and be able to produce 200,000bop/d.
Although these three Korean yards are
increasing their involvement in offshore
drilling rigs and FPUs, they have a huge
stake in the liquid natural gas carrier
(LNGC) market with numerous vessels on
order, including a single booking
distributed among them from the Qatar
Gas Project for the entire 34 LNGCs
requirement of that development, with an
anticipated expansion to a 70 vessel order.
China
Chinese shipyards are becoming more
involved in the building of larger and more
complex rigs as exemplified by multiple
options for advanced semi-submersibles
drilling units and the latest generation of
SSP FPSO hulls.
Yantai Raffles Shipyard, located at the
juncture of Bohai Bay and the Yellow Sea,
in northeast Shandong Province, has
numerous projects under way including
state-of-the-art squat cylindrical hulls.
Sevan Marine of Norway has the second of
its proprietary Sevan Stabilized Platform
(SSP) 300 FPSO designs under
construction by Yantai Raffles with a third
on order and options for four more from
the yard. Yantai Raffles fabricated the hull
for the very first SSP 300, the Piranema, for
Petrobras in Brazil (AOG May/June). The
SSP, able to store 300,000 barrels of oil in its
SSP 300 configuration, is distinguished by
being wider than it is high with an
operational draft typically one third of its
diameter.
Frigstad Discoverer Invest is to have a
6th generation ultra-deepwater semisubmersible
constructed. To be named
Frigstad Oslo, the semi is based on the
Frigstad D90 deepwater design. Currently,
Aker Brevik, Det Norske Veritas and Aker
Kvaerner MH, supplier of the drilling
systems and equipment package, valued at
about $72 million, are engaged in detailed
engineering work. Delivery is scheduled in
1H 2009. Frigstad Discoverer Invest holds
options for three additional semis from
Yantai Raffles.
Offshore Rig Services of Norway has had
first steel cut for the first of four new
generation semisubmersible drilling rigs
to be built by Yantai Raffles for operation
on the Norwegian Continental Shelf. The
hull and marine systems are the
responsibility of Yantai Raffles with the
drilling systems provided by National
Oilwell Varco, at a cost of about $300
million each. The first semi, the ORS
Pioneer, a Global Maritime GM-4000 design
rated to a water depth of 2460ft, is
scheduled for completion in 4Q 2008.
Yantai Raffles also has contracts for
three 300ft water depth rated jackups from
two undisclosed clients.
Hantong Shipyard, located on the
Yangtze River, Jiangsu Province, has been
awarded a contract from Sevan Marine to
build an SSP drilling unit hull. The first
application of an SSP for drilling, the rig
will be ready for harsh environments and
ultra-deepwater when completed in 1Q/2Q
2009 at an estimated cost of $430 million.
Sevan has also signed an agreement with
Hantong for construction of a fourth SSP
300 FPSO hull.
Moreover, in order to secure capacity for
future construction, Sevan has signed a
long-term agreement with Hantong
whereby the Norwegian company will
lease shipyard facilities until end 2012 and
secure rights to build up to nine additional
SSPs.
Dalian Shipbuilding Industry
Company (DSIC), located on the north
shore of Bohai Bay, Liaoning Province, is
to construct a Friede & Goldman JU-2000E
enhanced premium jackup drilling rig for
Noble Corporation for $190 million. Rated
for 400ft water depths in harsh environments
with a cantilever reach of 75ft, the
rig is slated for completion in 1Q 2009.
DSIC is also constructing three more
drilling rigs for Noble: two F&G JU-2000e
jackups, for delivery in 3Q 2007 and 1Q
2008, and an F&G 9500 Enhanced
Pacesetter design semi-submersible, to be
delivered 2Q 2008.
DISC fabricated the hull for the 1mmbo
capacity FPSO Belanak Natuna for
ConocoPhillips.
Shanghai Waigaoqiao Shipbuilding
Company is constructing the hull for the
ConocoPhillips newbuild FPSO for the
Peng Lai 19-3 Phase II Oil Development
Project in Bohai Bay. Topsides for the
vessel, now being fabricated at Sembawang
Shipyard, will be integrated in Singapore.
On completion in 2Q 2007, the FPSO will be
able to store 1.8 mmbo, process
190,000mmbo and handle 510,000 barrels of
fluid per day. AOG
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