VESSELS, RIGS, UPGRADES
David Paganie • Houston
Anadarko long-term plan
Sustained high oil prices and tight rig market conditions are forcing operators to employ long-term strategies to secure the necessary assets for drilling programs. Some are building new drilling rigs, while others are electing to upgrade existing assets.
Anadarko Petroleum Corp. plans to secure the necessary drilling rigs to execute its deepwater strategy over the next six years.
“A review of our worldwide deepwater drilling inventory along with the tightening deepwater rig market led us to lock in the equipment and services we need to execute upon our strategy,” says James T. Hackett, Anadarko president and CEO.” Nearly two-thirds of the rig time will be used to delineate and develop discoveries, and the remainder will be allocated for high potential exploration.”
As part of the plan, Anadarko, with Dominion Exploration & Production Inc. and Kerr-McGee Oil and Gas Corp., signed a four-year rig-share agreement under which Ensco International Inc. will build a new semisubmersible drilling rig to be namedEnsco 8500 with a target delivery date in May 2008. Anadarko committed to 50% of the rig time at a cost of almost $200 million over the contract term.
Anadarko has also executed a three-year drilling contract with Dolphin Drilling Ltd. to secure theBelford Dolphin drillship at a cost of $459 million. It is anticipated the vessel will be released to Anadarko beginning in mid-2007.
In addition, the operator is finalizing multi-year contracts worth approximately $1.19 billion to extend the company’s existing contracts and secure incremental rigs.
The company says it has identified multiple prospects throughout the deepwater Gulf, offshore West Africa, Georgia, and Gabon. The operator added that the company’s expanded rig position could provide leverage into additional opportunities if further tightening of the deepwater rig market materializes.
“Our rig-contracting efforts offer compelling economics and facilitate our deepwater drilling strategy.” Hackett commented. “In addition to addressing the cost side of the equation, we will protect our returns by hedging volumes in a manner to cover potential downside rig rates. While we believe the dynamics of the deepwater rig market over the next six years will be very different than past cycles, we think it prudent to manage potential rig rate risk like we manage other risks - by controlling the downside and executing upon our operational strategy”
Building on experience
Ensco says that the rig it is supplying to the consortium of Anadarko, Dominion, and Kerr-McGee,Ensco 8500, is primarily an enhanced version of its first deepwater semisubmersible rig,Ensco 7500.
TheEnsco 8500is being designed with capacity for drilling in 8,500 ft of water and can be upgraded to operate in 10,000-ft water depth if required. Enhancements to the new rig include a 2-million-lb quad derrick, offline pipe handling capability, increased drilling capacity, greater variable deck load, and improved automatic station-keeping ability.
The contractor adds that it is teaming up with an old friend to deliver the new rig. The company has entered into an agreement with Keppel FELS Ltd. in Singapore to construct the semi, worth approximately $312 million.
“This will be our sixth new construction project with Keppel FELS, either in partnership, or in keeping with more conventional arrangements,” said Carl F. Thorne, Ensco chairman and CEO. “Ensco and Keppel FELS have a history of successfully delivering high-quality newbuild rigs on time and within budget.”
The Ensco contract with the consortium of independents is for a firm, four-year primary term, plus four one-year extension options. The drilling contractor says it expects to be paid aggregate revenue of $385 million under the contract during the four-year primary term, which includes approximately $20 million payable upon delivery of the rig.
“TheEnsco 8500is expected to provide a cost-effective deepwater drilling solution to a consortium of important oil company customers, while expanding Ensco’s deepwater capability on a conservative and financially attractive basis,” says Thorne.
Ensco says construction continues on its jackup rigs,Ensco 107andEnsco 108, with deliveries scheduled for early 2006 and 2007, respectively.
World’s largest rigs
Aker Drilling, a new rig company established by Norwegian-based Aker ASA, has awarded Aker Kvaerner a fixed price turnkey contract worth approximately $1.2 billion, for the delivery of two sixth-generation Aker-designed H-6e deepwater drilling semisubmersibles, with an option to deliver an additional two rigs by 2010. The two rigs are scheduled for delivery in February and October 2008.
According to Aker Kvaener, the contract calls for the delivery of the two biggest and most advanced drilling rigs in the world. Martinus Brandal, Aker executive VP adds, “The design of the Aker H-6e rig is something entirely new in the rig industry. These rigs are a size up from other sixth-generation rigs, and the 6e designation denotes that they have been designed for extreme offshore environments.”
The engineering work for the two rigs will be carried out at Aker’s engineering office in Lysaker and its MH office in Kristiansad, Norway. Aker’s Brevik yard will perform hull design, and fabrication will be undertaken in part by Aker’s Verdal Yard. The assembly and commissioning of the rigs will be completed at the company’s yard in Stord, Norway.
PPL signs with Awilco Offshore
Singapore-based PPL Shipyard, a subsidiary of SembCorp Marine, has signed a contract worth $144 million with Awilco Offshore ASA to deliver a Baker Marine Pacific Class (BMC Pacific) 375 deep-drilling jackup rig. Construction of the jackup was expected to begin in the third quarter with delivery targeted by the end of the 4Q 2007.
The BMC Pacific 375 deep-drilling offshore jackup is a proprietary design developed and owned by Baker Marine Pte Ltd., a wholly owned subsidiary of PPL Shipyard. The jackup will be equipped with capacity to drill high pressure and high temperature wells down to 30,000 ft in water depths up to 375 ft. It will also be fitted with accommodation for 120 people.
Rig upgrade approved
Fred Olsen Energy ASA’s board of directors has approved the proposed $300 million upgrade of the semisubmersible drilling rigBlackford Dolphin(formerlyOcean Liberator). The improved asset will be capable of operating in up to 7,000 ft of water and will feature a new high-capacity drilling package and innovative deck layout. Upgrade work is scheduled to be complete in the first half of 2007.
The company says the rig will be capable of operating in deepwater environments.•