Kristiansand-based Hydralift is to deliver two drilling equipment packages to Santa Fe's two newbuild deepwater semisubmersible drilling rigs, which are under construction at the PPL yard in Singapore. The contract is worth NKr 650 million - the largest ever won by Hydralift - and includes options for a further two centers. - Among the drilling units utilizing a dual derrick drilling system supplied by Hydralift is the Saipem 10000 drillship.
The packages include dual derricks, pipe-handling machinery, riser tensioners, and catwalk machines. The derricks will be capable of accommodating all drilling tubulars for drilling to a total depth of 11,000 meters.
The Santa Fe order is the latest in a series and confirms the recovery in demand for equipment for mobile drilling rigs and vessels. Earlier this year, Hydralift clinched a contract from Mitsubishi Heavy Industries to supply a package including drilling equipment, compensation systems, and cranes for a core drilling vessel to be owned by the Japan Marine Science and Technology Center (Jamstec).
Since the contract initially was negotiated, the center has expanded the scope, lifting the value from the original NKr 335 million to NKr 450 million. The additional requirement is for a mud mixing system, to be supplied by Hydralift's new subsidiary, Procon Engineering, and the supply of a fully outfitted derrick to be delivered in three sections.
Market shift
Market shift
The first signs that the market was moving out of the doldrums in which it had been trapped by low oil prices for a couple of years came last year. Hydralift won an order to supply equipment for Diamond Offshore's Ocean Baroness semisubmersible rig, which is being upgraded for deepwater operations at the Keppel FELS shipyard in Singapore. Worth NKr 180 million, the package includes pipe-handling systems, a riser tensioning system, and a crown-mounted drillstring compensator. Part of the order has already been delivered, and the remainder will be delivered in October.
"This was the first contract to a floating drilling unit anyone had won since 1998," says Hydralift export sales manager Karsten Meling. "We are optimistic about what is coming over the next few years. We see an upturn in activity for deepwater drilling vessels."
To cope with its order book, Hydralift has been taking on extra staff, though Meling sees no problems in meeting orders. These are fairly well spaced out - following delivery of part of the Ocean Baroness order earlier this year, the remainder is scheduled for October. The first Santa Fe package is due to be delivered in mid-2002, and the second 10-12 months later; while the Jamstec package will be delivered through the second half of 2002.
The company also has orders for drilling equipment for two platform projects in the Norwegian sector. The delivery to ExxonMobil's Ringhorne is scheduled for the second half of this year, and for Statoil's Kvitebj rn in February and March next year. Hydralift designs and assembles its own equipment, and builds control systems and cabins, but does not undertake heavy steelwork or welding.
Other recent include the delivery of complete Hydralift equipment packages to the semisubmersible Stena Tay and the drillship Saipem 10000. The Stena Tay package included a 750-ton cylinder hoisting rig and the Saipem 10000 delivery includes a dual derrick system. "Our equipment has an excellent record in terms of operational performance and minimal downtime," Meling claims
Another important reference for the mobile drilling unit market is the Stena Don semisubmersible, which was supplied with the complete Hydralift "rig concept" package a cylinder hoisting rig, derrick, substructure, and deck cranes. At the time, this was the company's biggest delivery, but it has now been superseded by the Santa Fe order.
Acquisitions
In addition to equipment development, the company has also bolstered and expanded its product range through a number of acquisitions. In February, it agreed to buy Procon Engineering from the Prosafe group for a cash payment of NKr 118 million. Based at Asker near Oslo, Procon Engineering specializes in engineering and supplying dust-free handling systems for drilling mud and cuttings. Its capabilities include systems for grinding and reinjecting cuttings.
Procon's deliveries of facilities for mixing, treatment and return of mud on both floating and fixed installations complement Hydralift's product range in drilling equipment, the company says. Procon is expected to add revenues of some NKr 220 million to Hydralift this year.
The company has also consolidated its position as a supplier of offshore and marine cranes through acquiring another Norwegian company, Staalprodukter, which produces lattice boom cranes. The latter's strength as a supplier of ordinary cranes for offshore installations is expected to put the combined company among the world leaders. The first order to be jointly supplied by Hydralift and Staalprodukter has been placed by Halliburton Brown & Root for the Barracuda and Caratinga projects in Brazil. This calls for six cranes, both lattice-boom and knuckle-boom, worth some NKr 50 million.
Hydralift has also bought a minority stake in Sense Technology, another Kristiansand-based company that supplies driller's cabins complete with controls and instrumentation. The move widens the scope of the integrated drilling equipment package which the company can offer, and is a response to customers' wishes, Meling says. Sense Technology's first delivery, since Hydralift became a part-owner, will form part of the Santa Fe order.
Finally, Hydralift has acquired the French company, Brissonneau Lotz Marine (BLM), which makes mooring systems, jacking systems for jackup rigs, and pedestal cranes. Aside from pedestal cranes, BLM's products represent new markets for Hydralift. With its acquisitions and current high level of activity, Hydralift has grown considerably, and now has some 400-450 staff in Kristiansand and about 1,000 in the group as a whole.
