Judy Maksoud, International Editor
Barry Harding, Harding Resources Inc.
The number of jackups under construction and on order today is greater than at any other time in the history of offshore rig construction. The jump in newbuilds has been particularly dramatic over the last 18 months, and the numbers continue to rise.
In 2005, the last yearOffshore published the Deepwater Jackup poster, there were 90 rigs listed on the poster, with 26 of the rigs (29%) under construction. Today, there are 117 jackups listed on the poster, with 46 (39%) under construction or soon to be built.
More in the mix
Deepwater jackup orders are being placed by more companies in a greater number of yards around the globe. The number of countries getting in on the newbuild action is growing, particularly in Southeast Asia, where Chinese and Indonesian yards are garnering a growing market share. The UAE has also gained a foothold in the newbuild jackup market. Still, as expected, the majority of the 117 rigs under construction are being built in Singapore.
The LeTourneau rig design is the most popular for newbuilds, totaling 39 (33%) of the 117 rigs listed. The Keppel FELS design comes in second, cornering 25% of the market (29 rigs). There are 20 Baker Marine design rigs on this year’s list (17%) with 12 (10%) of the MSC design in the newbuilds category. Eleven newbuilds (9%) will be of the Friede & Goldman design.
Going deeper
Figures in this year’s poster reflect that water depth capability is increasing. Of the 117 newbuild jackups, 81 are rated for 350-399 ft (107-122 m) water depth, with 52 of those capable of working in 350-374 ft (107-114 m) of water. There are 33 jackups that are rated to work in 400-450 ft (122-137 m) and two rated for 451-500 ft (137-152 m). One jackup on the list, Rowan Companies’Bob Palmer super Gorilla XL, will operate in >500 ft (>152 m) water depth.
The number of rigs under construction increased by 77% between 2005 and 2007.
The number of rig owners and drilling contractors is also on the rise. There were 18 drilling contractors listed on the 2005 poster. Since 2005, two of the contractors, Odjfell and Smedvig, have been acquired by Seadrill. Despite these acquisitions, the 2007 deepwater jackup poster lists 24 rig owners and drilling contractors, reflecting the emergence of six new owners and contractors, four of which are in India.
Unit cost per jackup for 2005 was approximately $150 million. According to Singapore-based rig builders, the construction cost for jackup rigs has risen about 30% over the last two years to average $180-$190 million per rig.
With demand for new units still strong, prices are expected to exceed $200 million per rig in the next year.
A jackup designed for 114 m (375 ft) water depth capable of drilling high-pressure and high-temperature wells could be negotiated for $180 to $190 million, says T.K. Ong, SembCorp Marine subsidiary PPL Shipyard managing director.
A rig with 91-107 m (300-350 ft) water depth capability with a similar design would cost $180 million, according to officials at Keppel FELS.
Most of the cost increases are due to tighter supply of equipment and steel, officials say. There is also an issue of limited yard space.
Yards are rising to the challenge by accelerating rig building times. This is especially true of Keppel FELS, which in early March delivered its KFELS B Class jackup,PV Drilling I, to Vietnam Oil and Gas Group two months a head of schedule.
Ong says PPL and parent company SembCorp Marine are negotiating more jackup contracts in addition to 13 rigs designed to PPL’s proprietary design, the Baker Marine Pacific Class 375, launched in 2003.
The order book for SembCorp Marine Ltd. amounted to $4.64 billion in mid-February 2007, with project deliveries scheduled through 2010.
“2006 has been an exceptional year of performance for SembCorp,” says Tang Kin Fei, SembCorp Group president and CEO. “We are now focused and are poised for further growth with sound fundamentals in our utilities, and marine and offshore engineering businesses. Backed further by our strong balance sheet and favorable industry prospects, SembCorp is in a better position than it has ever been to seize global opportunities as they arise, and grow.”
As of March, PPL planned to deliver four jackups this year, five in 2008, and two in 2009.
Keppel Offshore & Marine Ltd. had a busy 2006 and is mid-way through an even busier 2007. The Keppel O&M order book increased by 46% to $6.83 billion at the end of last year, the company says. According to Keppel, its global facilities are doing more offshore work, with $4.7 billion worth of contracts secured last year. The company says 37% of the $4.7 billion in contracts was for jackups.
A company statement released in January says Keppel completed and delivered 26 newbuilds and conversions totaling $1.3 billion, on time or ahead of time and within budget last year.
In 2006, Keppel FELS delivered six jackup rigs. Its last jackup for the year left the yard on Dec. 27. TheWilcraft, a KFELS B Class rig, was delivered four days ahead of schedule, Keppel says.
