China shipbuilders yet to recover from setback while singapore yards still in good shape

With the last few years of shipbuilding and global economy downturn, 2013 we see the global economy with mild recovery but the shipbuilding industry still set with some China big players facing severe credit crunch and some are well-established with strong fundamental chinese shipbuilders. Cosco's share price has plunged 28 per cent to 74 cents while Yangzijiang was down 25.4 per cent to 85 cents as of this month, while they contended with the shipbuilding downturn in China and now the credit squeeze in the mainland banking system.

Going by the gloomy forecasts from analysts on the sector, these Chinese shipbuilders' fortunes may not change for the better any time soon ( while I hold some shares of Cosco two years ago, seems likely it will not be any sooner to see sign of "ROI" with the small sum being set aside to this counter.. . :(   

One long, dark shadow is being cast by another fellow shipbuilder Hong Kong-listed China Rongsheng - once billed as the biggest shipbuilder in the world in terms of tonnage of orders on hand - which faces the grim prospect of insolvency. It has gotten workers to take "holidays" and even had to borrow money from its founder to stave off a cash crunch.

RS also had to contend with laid-off workers who formed a blockade outside the company's Nantong shipyard over a wage dispute, even as it tried to fend off other problems such as a lack of orders this year. Its woeful tale provides a cautionary lesson for investors on the problems plaguing China shipbuilders. China Rongsheng Heavy Industries Group, China's largest private shipbuilder, appealed for financial help from the Chinese government and big shareholders on Friday after cutting its workforce and delaying payments to suppliers.

Analysts said the company could be the biggest casualty of a local shipbuilding industry suffering from overcapacity and shrinking orders amid a global shipping downturn. New ship orders for Chinese builders fell by about half last year.

Hours after China Rongsheng made its appeal in a filing to the Hong Kong stock exchange, where the company is listed, Beijing vowed to bring about the orderly closure of some factories in industries plagued by overcapacity. The statement by the State Council, or cabinet, laid out broad plans to ensure banks support the kind of economic rebalancing Beijing wants as it looks to focus more on high-end manufacturing. It did not mention any specific industries or companies and there was no suggestion it was referring to Rongsheng.

RS said it was expecting a net loss for the six months that ended June 30 from a year earlier, according to the filing. The company reported a net loss of 572.6 million yuan ($93.47 million) in 2012, its worst-ever, despite getting government subsidies of 1.27 billion yuan in that year, its latest annual report shows. It's shares plunged 16 percent to a record low in heavy turnover on Friday, leaving its market capitalisation at just under $1 billion.

Some Investment Research think that Cosco with its large debt burden will be vulnerable. The group's net gearing climbed to 131 per cent as at the end of the first quarter from just 10 per cent at the end of 2010. Cosco's existing $3.4 billion debt would need to be refinanced within the next 12 months. The yard's  free cash flow is also likely to remain negative for the next few years, due to its low net profit margin and increasingly back-end loaded contracts in its order book..

However, one analyst believes that the stress on the Chinese shipbuilding industry from the slowdown in vessel orders may not affect all shipbuilders in the same way. On the flipside, signs of instability at a yard can become a self-fulfilling prophecy, as shipowners withhold progress payments if there is concern that the yard cannot complete the order. As of the first quarter, Yangzijiang's order book was US$3.3 billion, 75 per cent of which is in container vessels. In our view, Yangzijiang's ability to produce high quality, large container vessels and a strong balance sheet with 11 billion yuan in new cash and financial assets makes it a long-term winner in the shipbuilding industry.

By contrast, another Chinese shipbuilder, Singapore-listed Yangzijiang Shipbuilding (Holdings) Ltd, has secured total orders of $1 billion in the first half, Barclays said.

While the Chinese shipbuilding industry faced "unprecedented challenges", China Rongsheng's board was confident management could ease pressure on working capital in the near future and maintain normal operations, the company said in the filing.

The Chinese government has been trying to support the domestic shipping industry since the 2008 financial crisis, and local media reports said this week Beijing was considering policies to revive the shipbuilding business.

The holding orders of Chinese shipyards dropped 23 percent in the first five months of this year compared with a year earlier, according to the China Association of the National Shipbuilding Industry. New orders dropped to a seven-year low in 2012. ($1=6.1258 yuan)

Following the setting up of YOEPL, together with one of our wholly owned subsidiaries, Jiangsu Yangzijiang 

Shipbuilding Co. Ltd (“Jiangsu Yangzijiang”), another new subsidiary named Jiangsu Yangzijiang Offshore Engineering Co., Ltd (“JYOEC”) was set up in Taicang.  On 3 December 2012, JYOEC secured its maiden offshore contract – a Jackup Drilling Rig worth US$170 million. 

Some of YZJ other recent ventures that extend on shipbuilding capabilities include steel fabrication for building facades of petrochemical plants, energy equipment manufacturing as well as other non-shipbuilding activities. 

Beyond shipbuilding and its related activities, they have developed supplementary income streams from conservatively managed businesses such as low-risk financial investments. They also leveraged on strong balance sheet to assist ship owners in ship finance and lease vessels for income. 

YZJ currently manage more than Rmb 11 billion of financial assets that are over and above its Rmb 2 billion cash reserve, which is held for working capital, expansion and dividend payment needs. 

Having supplementary income streams puts them in the favorable position of being able to be selective on shipbuilding contracts during downturns. That means they need not enter contracts on compromised terms and conditions. They expect the shipbuilding environment to remain difficult in 2013 and intend to deliver 42 vessels in 2013, which is lower than the 51 vessels done in 2012. 

The poor shipbuilding market has proven to be an opportunity for YZJ to become more client-oriented and competitive. They will focus on developing vessels that meet ship-owners’ needs and focus on large vessels, for which there is greater demand.  Even though faced with stiff competition as many other shipyards are likewise trying to enter this sector to mitigate the shipbuilding downturn, they will not easily take orders with unfavorable terms just to secure contracts. 

Rather, they intend to secure offshore orders selectively, and work towards a good track record of timely and successful deliveries. During the downturn, they will seize opportunities to generate additional income streams through joint ventures with established players in low-risk business sectors that are synergistic with their Group’s development. 

OIL rig-building yards in China may offer lower prices and more attractive financing, but Keppel Fels remains unfazed by talk of keener competition and tighter margins. The world’s largest rig-builder has its own competitive edge – on-time delivery and costs that are kept within budget.

Keppel Fels told The Straits Times: “Look at our orders. The Chinese story has been there for at least two years now, but today, we’re still getting our B Class orders. This year alone, when the Chinese have been playing in full swing, we’ve already got eight jack-ups. ”

This year, Keppel Fels is delivering a record 20 rigs, well over the previous peak of 13 seen in 2009. http://kimwhye.blogspot.sg/2013/02/keppel-handover-first-few-of-twenty.html

Our Tuas yard was abuzz with activity during a recent visit by The Straits Times, with workers clocking overtime hours and the building docks fully occupied. This amid reports of widespread job layoffs at Chinese shipyards even as they diversify into rig-building to offset their ship order slump. There has also been the recent credit crunch on the mainland.

The B Class is Keppel’s signature rig and is its most popular design. Since 2010, its B Class rigs have accounted for about 45 per cent of the total number ordered among rigs of its class globally. Developed by its technology arm and launched in 2000, the rig is able to operate in water depths of up to 120m and drill to depths of 9,000m.
http://kimwhye.blogspot.sg/2013/04/the-61st-b-class-jackup-ordered-since.html

We just delivered its 45th B Class rig recently – a fitting milestone given that this year is parent company The rig was delivered to Arabian Drilling Company (ADC) 14 days ahead of schedule,  on budget and with a perfect safety record. Keppel FELS was awarded an early delivery bonus of US$210,000. Named ArabDrill 50 at a ceremony yesterday, the rig will be chartered to Saudi Aramco for operations in offshore Saudi Arabia. The innovative and cost-effective KFELS B Class jackup rig has proven to be the trusted, reliable workhorse of the industry, and has performed excellently in major offshore exploration and development programmes in various locations worldwide. It has been employed by some 20 international drilling operators in over 15 countries. With usage rates calculated on a daily basis, and costing about US$150,000 to US$190,000 a day, having a more efficient rig can result in cost savings of several million dollars per drilling project. This could amount to many more millions of dollars, if one considers that the lifespan of a rig is typically at least 20 years.

http://kimwhye.blogspot.sg/2010/10/insights-of-jack-up-drilling-rig.html
http://kimwhye.blogspot.sg/2011/09/more-on-drilling-jack-up-and-some-of.html

Listing 2013 MODU Construction 

Local behemoths facing keen competition from China and Korea yards

Extracts with courtesy of Straits Times 30April 2013

KepCorp and Sembcorp Marine are the behemoths that build around 70 per cent of the world's oil drilling jack-up rigs. Both which employed approximately 75,000 people and contributed 1.6 per cent to economic output in 2011 per estimate figures.

However they are now facing challenges from several competitions. These include the Chinese players and structural changes to the industry. In what could be a replay of the earlier challenges the two companies faced in the 1990s, the key question is whether Keppel and SembMarine can yet again pull a rabbit out of the hat. Their stories are held up as examples of Singapore's success in ship building industry. In the 1960s shipbuilding and shiprepair were identified as key economic sectors as they could quickly create jobs for many workers. The Government took up stakes in shipyards, including two that were renamed Keppel Shipyard and Sembawang Shipyard.

After decades of growth, consolidation and expansion into the rig construction business, these two are today known as Keppel and SembMarine. However, their main activities are no longer in shipbuilding. Both now build rigs used by energy companies to drill for oil at sea. These include jack-up rigs ( for shallow water depth of 400feet ) - which cost around US$200 million (S$247 million) each - as well as the more expensive semi-submersible rigs that operate in deeper waters ( around upto 10,000 feet ). They can be priced at US$400 million to US$500 million each, with high-specification builds costing more than US$800 million. Those that are working for the north seas cost much more due to the harsher environment and many features that required additional cost to cater for.

Leadership challenged :

The lucrative rigmaking industry has increasingly seen competition from both Chinese and South Korean shipmakers in recent years. Like Keppel and SembMarine, Chinese shipmakers have been shifting from building ships to rigs, as the shipping industry continues to slump amid a massive oversupply of vessels.

With cheaper prices and more favourable financing conditions, these Chinese yards have been snapping up contracts from firms looking for lower-specification, lower-cost builds.

To add to the problem, more and more high-value contracts, like ultra-deepwater "semi-submersible" rigs, have also recently been going to Chinese yards, like Cosco and Raffles CIMC.

For instance, drilling rig services provider Frigstad Offshore early this year ordered two US$650 million untra-deepwater rigs from China's CIMC Raffles. Such orders are right up the alley of Singapore's rigmakers. They're one of the newest most advanced designs, meant to work in harsh deep water environments.

CIMC can build these two rigs for Frigstad is the day that CIMC is on a par with Singapore yards. They won't just be taking low-value rig work from Singapore. It is estimated that as of April 22, Chinese yards this year have won US$2.95 billion in jack-up rig contracts. This means they overtook Keppel and SembMarine, which won only US$2.12 billion.

At the same time, South Korean companies such Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering are also muscling in. They specialise in ship-shaped vessels such as drillships.

Keppel and SembMarine have been investing hundreds of millions of dollars in Brazil, especially after the 2007 discovery of likely rich oil reserves in the deep waters off the country's coast. The aim was to win lucrative rigbuilding deals from Brazil's state oil company Petrobras and its unit Sete Brasil.

Brazil has strict "local content" requirements which state that most of the components for oil platforms sold to these firms need to be produced in the country.

Keppel was an early mover, having been in Brazil since 2000. It bought a yard in the country in 2010 in order to focus on offshore support vessels which are used alongside oil rigs. This added to its existing yard which builds rigs.

And SembMarine is building a Brazil yard and has already secured contracts in the country.

All well and good, except that their biggest client in Brazil, Petrobras, has run into financial difficulties. These include spending and investments that have ballooned far more than initially planned, and government caps on how much it can charge domestic customers for oil. As a result, Petrobras shares have plummeted, losing half their value since 2010. Petrobras has also been squeezing the margins of its suppliers.

Also, Brazil is facing high inflation which could put upward pressure on labour costs.

Adapting to challenges:

TO THE credit of Keppel and SembMarine, they have already identified these issues and taken steps to ensure their businesses remain profitable. Mexico is one frontier. It is growing in importance after state oil firm Pemex made a big crude oil discovery in the deep waters of the Gulf of Mexico last August. Both Keppel and SembMarine have won deals from Mexican customers since then, leading market players to cheer their effort to seek out business opportunities in other high-growth markets.

The two companies are also focusing more on some of their specialities outside rigbuilding.

Keppel is co-designing an Arctic jack-up rig to tap the demand for platforms that can withstand the tough conditions there. The company has also signed a deal with Norway's Golar LNG to convert liquefied natural gas (LNG) vessels into Floating LNG vessels. This will give the firm more exposure to the fast-growing LNG market.

SembMarine has been getting more ship repair work, providing more diverse sources of income. "Ship repair is not something new for SembMarine, it's to drive more work," said DMG.

Both shipyards should continue to differentiate themselves, and spend more on research and development, say analysts.

"The key thing for Singapore yards is to find new products that are not in direct competition with these guys," said Mr Saw, referring to its overseas competitors.

Competition also works both ways. Even as Chinese companies eye the customers of Singapore firms, Keppel recently bagged an order from Falcon Energy Group, a company which previously ordered two jack-up rigs from China.

Back in the 1980s and 1990s the environment for the shipyard business was bad after the global recession of the mid-1980s, with cost pressures and external competition. The two companies were told at that time that they were in a sunset industry.

According to CIMB, Korean yards beat Singapore yards hands-down in terms of yard size. Each Korean yard is almost as big as the combined size of KEP’s and SMM’s yards in Singapore, explaining their competitive advantage in the market for large-scale offshore structures (newbuild FPSOs, FLNGs, TLPs) and drillships (hulls as big as 13,000 TEU container ships).

It also noted that very little apprehension was expressed over Singapore yards’ intention to break into the drillship segment as the Koreans’ market share appears to be protected by more advanced technologies and shorter construction time (of 12-15 months vs. >24 months for Singapore yards.

The Koreans were generally curious about Singapore’s capabilities in conversion and the outlook for jack-up rigs – in the event they decide to venture down the value chain. Though we were awed by the Koreans’ yard space, we believe Singapore still has the upper hand incosts, margins, business flexibility and global yard presence.

Firstly, a reliance on cheaper foreign labour is almost non-existent in Korea. The Koreans’ average low-end pay is US$40,000 p.a., triple that of Singapore.

Secondly, profitability remains the top priority of Singapore yards, with operating margins of 12% vs. the Koreans’ 8%. Thirdly, Singapore yards are able to diversify to from rig-building to building semi-sub accommodation and FPSO conversion while the Koreans remain fixated on high-steel content structures (newbuild FPSOs), ship-shape vessels (drillships, LNG carriers) and mass-produced containers in bulk orders.

Finally, Singapore builders leverage their global yard presence, including Brazil, to beef up their capacity.

Although Chinese rig builders have recently made some breakthroughs in rig building, they still are no threat to Singapore yards, CIMB said in a recent report about the offshore sector.

CIMB points out the rigs which are ordered at Chinese yards including Waigaoqiao and Rongsheng are "either heavily financed or have lower specifications" and heavy financing by Chinese yards is the main attraction for companies to build rigs in China.

"We are not overly concerned by the competition posed by the Chinese for Singapore yards. Traditional drillers with stronger cash flows should still find comfort in Singapore and Korean yards, unwilling to take on risks in quality and delivery," CIMB said.

The aged global rig fleet is in need of replacement as consumption for energy increases in emerging economies. Of the world's 500 jack-up rigs, about 300 are over 30 years old.

A new jack-up rig could set back a drilling operator or national oil company by about US$200 million at current prices. And now, their choices are not confined to the top five yards in Singapore or Korea any longer: China yards like Cosco, CIMC Raffles, and Dalian Shipbuilding have entered the picture. Barclays estimates that, Chinese yards have grown their market share of rigs from 5 per cent to about 30 per cent currently.

And it could increase further. Religare Capital surmised that Chinese yards will be capable of rivalling Singapore yards in terms of rig production capacity by 2015. The Barclays projections corroborate that: China yards may capture 10 percentage points more of market share in the next two years. While the perception is that Chinese yards stick to less complex and commoditised jack-up rigs, and are not competing head-on with the likes of Keppel and Sembmarine, that has proven to be increasingly untrue.

State backing has meant Chinese yards often offer discounts between 10-20 per cent off contract prices and extremely attractive payment terms of a one cent downpayment upfront and 99 per cent of the contract value upon delivery.

In contrast, Singapore yards have a milestone payment system or a 20 per cent-80 per cent payment structure.

But CIMB stands by their belief that the Chinese financier-builder model will not deprive Singapore yards of their fair share of order wins. Traditional drillers with stronger cash flows should still find comfort in Singapore and Korean yards, unwilling to take on risks in quality and delivery.

Yet, the aggression shown by Chinese yards has led to a drop-off in operating margins of rig projects, reported Keppel Corp and Sembmarine recently.

Gone were the boom eras of margins that could go as high as 20 per cent. Instead, going forward, management for both companies are keeping to more modest ranges of between 10 and 13 per cent.

For yards in general - whether in Singapore or China - they will see a weakening in pricing power because they're competing against each other for business.

Singapore yards have articulated clearly that their competitiveness hinges on a mixture of productivity gains and innovation.





"We recognise that there is increased competition in the rigbuilding sphere but we are

confident that Keppel Offshore & Marine is able to distance itself through innovation, technology and experience," COO of Keppel Offshore and Marine, Chow Yew Yuen told BT. Keppel has pursued a strategy of "Near Market, Near Customer", setting up overseas yards in markets like the US, Brazil and China to tap on interest from oil and gas regions around the world and to meet local content demands, said Mr Chow.

And Sembmarine will be shifting from its Jurong premises to a new Tuas Integrated Yard end of 2013. The new space is configured to minimise the movement of manpower and materials.

This year, Yangzijiang chairman Ren Yuanlin told BT that one way for Singapore yards to keep their edge over Chinese yards is to partner with them. Know-how is Singapore's strong suit while China has labour, a resource Singapore has sore demand for.

Yangzijiang itself pursued this strategy in 2010 when it bought over Baker Technology's 15 per cent stake in Sembmarine rigbuilding subsidiary PPL Shipyard, sharing board seats with Sembmarine.

Competition has emerged for the two Singapore companies with news that Daewoo Shipbuilding and Marine Engineering, part of South Korea’s Daewoo conglomerate, plans to re-enter the jack-up rig-building market since its last produced them in 1983.

Earlier this month two Chinese shipyards, Shanghai Waigaoqiao and China Rongsheng Heavy Industries, secured orders for three jack-up rigs, two of them for a Luxembourg-based company called Prospector Offshore.

Analysts say that while the emergence of rivals poses a long-term threat, it will take time for Korean shipyards to catch up as they are not yet configured to build jack-ups. DBS Vickers Securities adds: “However, the potential increase in competition from Korea may limit Singapore yards’ ability to raise prices”.

Potential customers for Chinese yards may be attracted by the financing packages they offer, but would have to overcome concerns over lower specifications and patchy delivery records at such yards, some market watchers said. 

Offshore Drillship design and building market steaming up but not for long with plunging oil price...



Courtesy of Dolphin Drilling

August 2012, Odfjell Drilling has signed a contract with Brazil Petrobras for the charter and service of three drillships that will be constructed at the Jurong Aracruz shipyard in Espirito Santo. Seadrill is leasing another three drillships to Petrobras.The floating drilling vessels will operate mainly in the pre-salt blocks in the Santos Basin, and according to Petrobras, they can operate in depths of up to 3,000 meters, with a drilling capacity of up to 10,000 meters.

The contracts were signed on August 3rd, and they are all associated with Petrobras’s newbuild program, according to a press release from Odfjell Drilling. Odfjell won the contract in conjunction with its Brazilian partner Galvão Oleo&Gás and Sete Brasil, and Petrobras also entered into agreements with Queiroz Galvão, Petroserv and Odebrecht for another six semi-submersible platforms in which KeppelFELS has started its engineering work and construction planning already.

“This is an important milestone in the development of Odfjell Drilling’s Brazilian drilling activities. The contract gives us an strong industrial basis and positions Odfjell Galvão for further opportunities in one of the most prospective drilling markets worldwide”, says Mr. Simen Lieungh, CEO of Odfjell Drilling.

The three drillships under the names “Guarapari”, “Siri” and “Itaoca” will be constructed in Brasil, by Estaleiro Jurong Aracruz, located in the state of Espirito Santo. The drillships will be based on the drillship design of the proprietary of the shipyard, Jurong Espadon, and will be capable of operating at 10,000 ft (3,048 m) water depth and drilling to depths of 40,000 ft (12,192 m). The local content on the ships ranges from 55 to 65 percent, as required by Petrobras which is same as the semi contract. This gives the local labour workforce good opportunity to keep their sleeves busy.

Another three drillships are also being constructed at the Jurong shipyard, and these will be operated by Seadrill, an offshore deepwater drilling company controlled by Norwegian John Fredriksen. Seadrill currently has five drill ships in operation in Brazilian waters, and four are on contracts with Petrobras.

Odfjell Drilling and Brazilian industrial group Galvão Engenharia recently formed a joint venture with the aim to own and manage the three drillships and develop future opportunities in the Brazilian drilling market. In February 2011, Odfjell Drilling opened a new office in Rio de Janeiro as a first step of expanding the activities in Brazil.

The Odfjell Galvão joint venture is owned on a 50/50 basis and will have a 20 percent stake in the three drillships. Odfjell Galvão will be responsible for management of the vessels throughout the contract period.

Odfjell Drilling is currently operating the Deepsea Metro II also on a contract for Petrobras. “The first milestone we reached in Brazil”, according to Mr. Johanson.

Deepsea Metro II is an ultra deepwater drillship owned by Metrostar (60 percent) and Odfjell Drilling (40 percent), suitable for drilling operations at water depths up to 12 000 feet.

Drillship Overview 2010 - courtesy of ABS

Main Drivers for Vessel Design Selection :

Water depth


Environmental conditions - Harsh or benign

Variable deck load

Transit speed

Station keeping

Owners preferences -Some owners have in-house designs or have chosen a specific design for unknown reasons

Yards preferences and qualifications- Most yards have experiences with some designs or have in-house designs

Market requirements - Shortage in market of specific rigs or niche market

Trends in demand of vessel

Waterdepth capability- 12,000ft water depth capability

Innovative designs-  Smaller drillships with Panamax beam
Circular shaped rigs
Innovative equipment and solutions
Slim high pressure riser with surface BOP

Drilling mast (as a contrary to derrick) with carousel pipe storage

Below deck riser storage
Dual Derrick

Set riser and BOP while drilling open portion of wells
Can equip Dual Derrick 
No patent issues

Less people onboard, less maintenance

Often have so called ”tripsaver” arrangement similar to those used in Semi submersible

POB
1,5 requires ~180 POB
Dual requires ~200 POB Accommodation, lifesaving, galley, utilities etc.

 

US company Ensco, responding to high market demand driven by an ongoing successful offshore discoveries,  has ordered a new advanced-capability, ultra-deepwater drillship to be built at the Samsung Heavy Industries, Co. Ltd. (SHI) Shipyard in Geoje, South Korea. The vessel, ENSCO DS-8, will be the sixth Samsung DP3 drillship in the Ensco fleet, extending the benefits of Ensco’s fleet standardization strategy. It is scheduled for delivery in the third quarter of 2014.

The contract also includes options for two additional drillships of the same design. The fleet expansion will extend Ensco’s advantage of operating the newest ultra-deepwater fleet among global drilling contractors.

Including commissioning, systems integration testing, project management and spares, the construction cost is expected to be around US$650 million. Consistent with the previous five Samsung ultra-deepwater drillships ordered since 2007, the new unit will have advanced capabilities to meet the demands of ultra-deepwater drilling in water depths of up to 12,000 feet and a total vertical drilling depth of 40,000 feet. New features on ENSCO DS-8 include retractable thrusters, enhanced safety and environmental features, improved dynamic positioning capabilities and advanced drilling and completion functionality including below-main-deck riser storage, triple fluid systems, offline conditioning capability and enhanced client and third-party facilities.

The new drillship is based on the proprietary Samsung GF12000 hull design measuring 755 feet in length and 125 feet in width. It will offer a payload in excess of 22,000 metric tons and a 1,250-ton hoisting system. The rig’s design and capabilities include numerous features that increase operating efficiency. Primary to these capabilities are enhanced and redundant offline tubular stand building features and a 165-ton active heave compensating construction crane, allowing for the deployment of subsea production equipment without interference with ongoing drilling operations. The rig, which will be initially outfitted for drilling in water depths of up to 10,000 feet, will be equipped with dynamic positioning in compliance with DPS-3 certification; six-5.5 megawatt thrusters for enhanced station-keeping; expanded drilling fluids capacity; a 15,000-psi subsea well control system with six rams, upgradable to seven rams and/or a second BOP stack; burner boom for well testing; and living quarters for up to 200 personnel.



ENSCO DS6

Ensco’s three active DP3 drillships are currently contracted into 2016 in the U.S. Gulf of Mexico, Brazil and West Africa. A fourth, ENSCO DS-6, is currently at KeppelFELS undergoing some minor modifications in preparation for its first well assignment under a five-year contract with BP. ENSCO DS-7 is scheduled for delivery in the second half of 2013.

Courtesy of various Drillship Designers

Drillships Listing



June 2013, ENSCO DS-10, advanced-capability DP3 ultra-deepwater drillship based on the Samsung GF12000 hull design will be the eighth Samsung DP3 drillship in the Ensco fleet, further extending the benefits of Ensco’s fleet standardization strategy. It will be built at the Samsung Heavy Industries, Co. Ltd. (SHI) shipyard in South Korea, with delivery scheduled for the third quarter of 2015. The agreement includes an option for an additional drillship of the same design.

ENSCO DS-8 and ENSCO DS-9, also based on the GF12000 hull design, are scheduled for delivery in 2014. Ensco is currently the only drilling contractor offering the advanced features of the GF12000 hull design.

Including commissioning, systems integration testing, project management and tubulars, the construction cost is expected to be approximately US$625 million. Measuring 755 feet in length and 125 feet in width, ENSCO DS-10 will offer a 1,250-ton hoisting system with enhanced offline capability. Like ENSCO DS-8 and ENSCO DS-9, the new unit will have advanced capabilities to meet the demands of ultra-deepwater drilling in water depths of up to 12,000 feet and a total vertical drilling depth of 40,000 feet. It will be initially outfitted to work in water depths up to 10,000 feet.

Features include: retractable thrusters; enhanced safety and environmental features; improved dynamic positioning capabilities; and advanced drilling and completion functionality, including below-main-deck riser storage, triple fluid systems and offline conditioning capability. The drillship also incorporates enhanced client and third-party facilities with living quarters for up to 200 personnel.

A 165-ton active heave compensating construction crane allows for deployment of subsea production equipment without interference with ongoing drilling operations. ENSCO DS-10 includes a 15,000-psi subsea well control system with seven rams and can accommodate a second BOP stack.

Ensco’s four active DP3 drillships are currently working in the U.S. Gulf of Mexico, Brazil and West Africa. Three are contracted into 2016 and the fourth is contracted into 2018. A fifth drillship, ENSCO DS-7, scheduled for delivery later in 2013, is contracted to Total into 2016.

US based Rowan's one of three drillships, under construction in Korea, will work for Spanish oil giant Repsol at a day rate ranging from $614,000 to $624,000, depending on work location. The contract is expected to begin in the first quarter of 2014 following delivery in late 2013.

The drillship is expected to mobilize to West Africa for the first year of its commitment at an effective day rate of up to $624,000 per day. Repsol currently plans to move the Renaissance to the U.S. Gulf of Mexico for the remaining 2 years, at which point, the effective day rate will be $614,000 per day.  Rowan Renaissance is the first of three Rowan’s drillships under construction at Hyundai Heavy Industries. The drillships of GustoMSC P10,000 design, once completed, will be capable of drilling wells to depths of 40,000 feet in waters of up to 12,000 feet.

Mr Keller says “We are encouraged, though not surprised, by the interest we’re getting in these very high-specification rigs from operators and remain optimistic about our ability to obtain attractive commitments for the other 2 drillships in the coming months. We also received an extension from Hyundai Heavy Industries for our option to build a fourth drillship. We now have until early September to exercise that option at a price substantially similar to what we are paying for the third rig. In the meantime, we continue to see good demand in upward pricing pressure in the high-spec jack-up markets around the world.”

Furthermore, Rowan sees significant strength in the ultra-deepwater drillship market: “We believe the market is ready to absorb additional ultra-deepwater units. We are currently tracking active requirements for 23 ultra-deepwater drillships, including several outstanding proposals. While we continue to monitor projects in the frontier regions of the world, the focus of recent tender activity has been the U.S. Gulf of Mexico and West Africa.”

Drillship - courtesy of  ROWAN 



From the launch of the "Pelican" in 1972 GustoMSC has been involved in the design and construction of DP drill ships. During the 90's GustoMSC developed a new generation drill ship, capable of drilling in maximum 10,000 ft water depth. In 2007 the development of the P10,000 was taken a significant step further, enhancing the design ready to step into the next generation.

One of the main features is the very large free deck area on both forward side and aft side of the drill floor. The vessel is specially developed to operate in water depths of 10,000 ft up to 12,000 ft and drilling activities to a total depth of 40,000 ft under the drill floor. The drill floor features a large racking setback capacity of 1,580 metric ton (1,750 st).

The design is equipped with a 165 mt heave compensated crane, for operations such as off-line subsea production tree handling, located just aft of the full double activity 4 million pounds derrick, making the vessel a ‘triple activity’ unit.

The ship’s DP system is DP3 compliant with station keeping ability and sufficient power to operate in typical Gulf of Mexico, Brazil or West Africa conditions.

Units built / under construction:

• Ensco DS-2 (formerly Pride Angola) 1999
• Ensco DS-1 (formerly Pride Africa) 1999
• GSF C.R. Luigs 1999
• GSF Jack Ryan 2000

• Deepwater Champion 2010
• Deepsea Metro I & II 2011

• Ocean BlackHawk & BlackHornet 2013
• Bolette Dolphin 2013
• Noble Don Taylor, Noble Bob Douglas,
  Noble Sam Croft & TBN 2013/2014

• Renaissance, Resolute & Reliance 2013/2014
• Ocean BlackRhino & Ocean BlackLion 2014

Principal dimensions and main particulars

• Length overall 229.6 m
• Length between perpendiculars 210.0 m
• Breadth (moulded) 36.0 m
• Depth at side 17.8 m
• Depth at centerline (moulded) 18.3 m
• Scantling draught 12.0 m

• Displacement (scantling draught) 76,000 t
• Deadweight (scantling draught) 44,500 t

Classification

The vessel, including her machinery, equipment and outfitting is designed and constructed under special survey of Det Norske Veritas, to obtain the Class notation:

✠ 1A1 Ship-shaped Drilling Unit E0
DYNPOS-AUTRO DRILL CRANE HELDK

                           Courtesy of NOV, downloaded from youtube. Ocean Black Rhino

Maersk Drilling has it's drillship fleet with advanced design and capabilities to include additional features for high efficiency operation such as dual derrick and large subsea work and storage areas, these allows for efficient well construction and field development activities through parallel and offline activities.

Maersk Drillship

The 228-metre long drillships will be able to operate at water depths up to 3,650 m (12,000 ft) and will be capable of drilling wells of more than 12,000 m (40,000 ft) deep. With their advanced positioning control systems, the ships automatically maintain a fixed position in severe weather conditions with waves up to 11 metres high and wind speeds up to 26 metres per second.

Special attention has been paid to onboard safety. The drillships are operated by relatively small crews, and are equipped with Multi Machine Control on the drill floor, providing a large degree of automation that ensures safe operation and consistent performance.

The main features of the vessel include:

•Multi Machine Control allows all standard operations such as stand building and tripping to be conducted without personnel on the drill floor. This ensures a high level of safety as well as consistency across crews.

•Dual pipe handling maximises uptime and drilling efficiency. While one string is working in the well bore, a second string operates independently. This way casing, drill pipe or bottom hole assembly can be assembled/disassembled and stored in the set-back area, ready for subsequent transfer for use in the well bore, significantly reducing non-productive time.

•The travelling system(crown sheaves, travelling block and main well centre top drive) has a 1,250 tons capacity, enabling a total drilling depth of 12,200 m/40,000 ft.

•Dual mud system ensures efficient change between mud types and completion fluids.

•Spacious accommodation for 230 people and considerable storage and tank capacity for long range and extended time operational capabilities.

•Hands free riser for safe handling of stand building.

•Dedicated guided gantry cranes for BOP and subsea trees handling.

Courtesy of Maersk - Deepwater Drillship

Courtesy of Maersk Drilling

Maersk Drilling has been in the forefront of offshore drilling and she has operated jack-up drilling rigs for more than 40 years in the North Sea as well as in the Middle East, Southeast Asia, Australia, the Mediterranean and the Gulf of Mexico.  It is a worldwide organisation with 110,000 employees and offices in 125 countries, headquartered in Copenhagen, Denmark. In addition to owning one of the world's largest shipping companies, comprising more than 500 container vessels, the A.P. Moller - Maersk Group is involved in a wide range of activities within the energy, shipbuilding, retail and manufacturing industries. KeppelFELS has already built a few high end drilling jack-ups and semi submersibles for Maersk and currently is still ongoing with the building of three CJ-70 jackup for the company.

Other Maersk facts:

 

•Second youngest fleet among peers

•First to drill a subsea well from a jack-up (wet BOP)

•Experienced in jacket installation using draw-works

•Extensive HP/HT experience
•Subsea work performed from our jack-ups
•Experienced in working with underbalanced drilling (UBD) tools

•Experienced in combined drilling and production on jack-ups

Rig Fleet - Courtesy of Maersk Drilling

Atwood Oceanics, Inc. announced in 2012, that one of its subsidiaries had entered into a turnkey construction contract with Daewoo Shipbuilding and Marine Engineering Co., Ltd. (“DSME”) to construct a third ultra-deepwater drillship, to be named the Atwood Admiral, at the DSME yard in South Korea.

Houston-based Atwood Oceanics has three ultra-deepwater drillships under construction in South Korea, to be delivered 2013, 2014 and 2015. Atwood’s wholly owned subsidiary, Alpha Eagle, entered into turnkey construction contracts with Daewoo Shipbuilding in 2011/12.

The three ships will be dynamically-positioned (DP3), with dual derricks, capable of operating in water depths to 12,000ft and drilling to 40,000ft. They will be classed by DNV and registered in the Marshall Islands.

Two yards in South Korea have received a steady stream of orders. More surprising is the volume of orders going to a shipyard in Brazil. Nina Rach explains the details.
The first construction contract, for the Atwood Advantage drillship, was announced in January 2011, with delivery scheduled for September this year, at a total cost of about $600 million. The ship will have enhanced technical capabilities: a seven-ram blowout preventer; three, 100 ton-knuckle boom cranes; a 165-ton active-heave ‘tree-running’ knuckle boom crane; and 200 person accommodation.

The second construction contract, for the Atwood Achiever, was announced in October 2011, and the drillship is to be delivered June 2014, at a cost of about $600 million. The Atwood Achiever will be similar to the previously announced Atwood Advantage.


The third construction contract, for the Atwood Admiral, was announced in September last year 2012, and the drillship is to be delivered in March 2015, at a cost of about $635 million, including two blowout preventers (“BOPs”), project management, drilling and handling tools and spares. The company recently increased the accordion under its senior secured credit facility by $200 million to a total of $550 million, which, together with available cash and cash flows from operations, is expected to fully fund the construction of the Atwood Admiral. Upon delivery, the Atwood Admiral will become the sixteenth mobile offshore drilling unit owned by the company.

The design of the Atwood Admiral will be identical to the previously ordered Atwood Advantage and Atwood Achiever – all three are DP-3 dynamically-positioned, dual derrick ultra-deepwater drillships rated to operate in water depths up to 12,000 feet and drill to a depth of up to 40,000 feet. The Atwood Admiral will also offer two seven-ram BOPs, three 100-ton knuckle boom cranes, a 165-ton active heave “tree-running” knuckle boom crane, and accommodations for up to 200 persons.

Seven ultra-deepwater drillships are under contract to be built at the Estaleiro Jurong Aracruz shipyard in Brazil.

Drillship Layout.pdf