Thirty-seven deepwater drilling units still in construction

The Discoverer Enterprise in the Ingalls yard at Pascagoula, Mississippi.

• Conoco/Reading & Bates' recently christened Deepwater Pathfinder. [44,875 bytes]

A new deepwater drilling fleet appears to be emerging from the world's shipyards - just about on schedule. Currently, 37 vessels are under construction. Several world-class units are now being delivered, but some problems have arisen.

• Pride International, the current industry leader in overall deepwater drilling unit construction with three drillships and six semisubmersibles under construction, recently had the fate of two of the company's semis put in jeopardy. Davie Shipyard in Canada, where the two semis were under construction, has filed for bankruptcy and shut down operations. Pride is trying to find alternatives to complete construction with minimum impact on the delivery schedule.
• Smedvig/Navion had to cancel the construction of one of their West Navion drillships as a result of delivery delays and major cost overruns. The company assumed a $90 million loss due to the cancellation.

Another factor that has affected construction is this summer's rash of tropical storms and hurricanes in the Gulf of Mexico. Several companies are reporting minor delays due to having to pull rigs out of Gulf of Mexico yards to avoid the impact of a serious storm.

Regardless of these setbacks, vessels are still being churned out - some at record pace. The delivery date on two drillships now under construction has been pushed forward, one drillship was delivered last month, one semi was delivered last month, one semi is due this month, and one drillship is in operation.

Delivery schedule

Samsung recently advanced the delivery for R&B Falcon's Deepwater Frontierfrom March to January 1999, and the Deepwater Millennium has been pushed up from August to May 1999. This marks one of the only times that delivery dates have been advanced on a mobile offshore drilling unit. Samsung also christened the Conoco/R&B Falcon Deepwater Pathfinder last month and the ship is on its way to the Gulf of Mexico for its inaugural assignment.

One drillship has entered operation. The converted Global Marine Glomar Explorer is now operating in the Gulf of Mexico for Chevron and drilling a world-record water depth well. The Glomar Explorer was delayed a few months due to vendor problems, but remains the newest operating rig in the seas at this time.

Noble delivered a major semisubmersible conversion project last month, thePaul Romano. The Paul Romano was converted from a submersible to an EVA 4000 semisubmersible capable of moored operation in 6,000 ft water depths. The rig is on its way to work for Shell Deepwater in Mississippi Canyon in the Gulf of Mexico. Noble will also deliver a similar conversion, Paul Wolff, around October 15. The rig has been contracted to Petrobras in Brazil.

The next rig due out will be Transocean'sDiscoverer Enterprise. The Discoverer Enterprise is expected to be in operation for Amoco in the Gulf of Mexico by January.

Ranked in the order of construction, Pride leads the industry with nine projects, followed by R&B Falcon with seven. Other company's with rigs under construction include:

Diamond Offshore - 1; ENSCO - 1; Global Marine - 2; Noble - 3; Ocean Rig - 4; Saipem - 2; Sedco Forex - 3; Smedvig - 2; and Transocean - 3.

Updates on the projects by drilling contractor are as follows:

Diamond Offshore

Diamond is currently undergoing a major conversion of a flotel to a deepwater semi submersible. The former Poly confidence is now underway to becoming the Ocean Confidence at the TDI-Halter yard in Sabine Pass, Texas. The Ocean Confidence will be capable of operating in 7,500 ft of water under full DP.

Construction is currently on schedule. The demolition of the accommodations unit has been completed as well as most of the pre-fabrication. The vessel has been moved to the drydock in Port Arthur, Texas and is expected at sea trials in July 1999. BP has the initial contract for work in the Gulf of Mexico.

ENSCO

ENSCO has received a contract from Burlington Resources for a DP semisubmersible based on the company's ENSCO 7500 design. The vessel will be capable of operating in 5,000 ft of water but may be enhanced to 7,500 ft at Burlington's option. ENSCO expects to complete construction in approximately two years. Revenues from the contract will range from $181 to $187 million, depending upon equipment options selected.

The vessel can be adapted for either DP or moored configuration and will have a variable deckload of up to 8,500 short tons. Burlington will operate the vessel in the Gulf of Mexico, but it will be capable of operating in Brazil, West Africa, and Asia as well.

Global Marine

Global Marine has one of the latest deepwater vessels to leave the dock. The Glomar Explorer recently left the Atlantic Marine dock in Mobile, Alabama, following some delays, to begin drilling in record water depths for Chevron. The Glomar Explorer is a converted DP drillship capable of operating in water depths up to 7,800 ft.

However, the company does have two more deepwater drillship hulls under construction at the Harland & Wolff yard in Northern Ireland. The drillships will be of the proprietary Glomar 456 Class design which are fully DP, and at full po tential, capable of operating in 12,000 ft of water.

Construction of both drillships is being done simultaneously. Currently, about one-third of the steel has been cut and is being assembled. They are reported to be on-schedule with both due for delivery in the first quarter 2000.

Global has named the prospective drillships. The first, which will initially work for BHP in the Gulf of Mexico, has been named theGlomar C.R. Luigs. The C.R. Luigs will be initially outfitted for 9,000 ft. The second drillship is named the Glomar Irish Sea and will work for Exxon in West Africa. The Irish Sea will be outfitted for 8,000 ft of water.

Marine Drilling

Marine Drilling has two semis currently under construction and still on schedule. The Marine 500 is under construction at the Jurong Shipyard in Singapore and will be delivered in January 1999. The rig will

go to work for a consortium headed by WAPET offshore Aus tralia and Southeast Asia. TheMarine 700 is being constructed at the HAM Marine yard in Pascagoula, Mississippi and will be delivered in March 1999. It is contracted to Exxon in the Gulf of Mexico upon completion. Both rigs are rated at 5,000 ft water depth capabilities.

Noble Drilling

Noble Drilling's efforts are focused on converting submersibles to semisubmersibles, based on the company's EVA 4000 deepwater semi submersible design. The company delivered one of these conversion projects last month, and another is due out around October 15. Three more conversion vessels remain under construction and two more projects are planned.

Late last month, the first of the EVA 4000 conversion projects was delivered. ThePaul Romano rolled off the line at the HAM Marine Shipyard in Pascagoula, Mississippi on-schedule. The rig is rated to 6,000 ft water depths in a moored configuration. It is on its way to work for Shell Deepwater in the Mississippi Canyon area of the Gulf of Mexico.

Around October 15, thePaul Wolff submersible-to-semisubmersible EVA 4000 conversion is expected to leave the TDI-Halter Shipyard in Sabine Pass, Texas for the waters of Brazil under a contract to Petrobras. The rig will be delivered on schedule and will feature full DP and 8,900 ft water depth capability.

Of the company's three conversions underway, the first due out is the Jim Thompson, due early in the first quarter of 1999. Jim Thompson is under construction at the HAM Marine Shipyard in Pascagoula, Mississippi to become a moored 6,000 ft water depth capable semi. The rig will work for Shell Deepwater in the Gulf of Mexico for its initial contract.

Next to be delivered will be theAmos Runner, currently underway and on schedule at the HAM Marine Shipyard in Pascagoula, Mississippi. The rig will be moored and capable of drilling in 6,600 ft of water. The rig will be delivered in the second quarter of 1999. A consortium of operators in the Gulf of Mexico, Marathon, Oryx, Murphy, have entered into a rig-sharing agreement for the Amos Runner upon completion.

The third conversion is also taking place at the HAM Marine Shipyard in Pascagoula. TheMax Smith is being converted to operate in 6,000 ft water depths in a moored configuration. Work is being carried out on-schedule and delivery is set for August 1, 1999. Amerada Hess and UPR have the initial contract in the Gulf of Mexico.

Still in the planning stages are theIlion and Shelf 6 semisubmersibles. Both rigs will undergo refurbishments and upgrades to be rated to water depths of 6,000 ft, pending Noble securing long-term drilling contracts. Construc tion on the Ilion will take place at the HAM Marine Shipyard and the Shelf 6 will undergo work at the New Dalian Shipyard in China.

Ocean Rig

Ocean Rig presently has four deepwater semis under construction. These rigs are based on the Bingo 9000 design, which incorporates a self-propelled, 6-column formation rated at 10,000 ft. The first bare-deck hull of the upcoming Ocean Rig fleet recently arrived at the Friede Goldman Offshore Shipyard in Pascagoula, Mississippi where the final outfitting will take place. Ocean Rig has contracts with Dalian Shipyard for construction of all four hulls and with Friede Goldman for the outfitting of the first two hulls, and options on the second two hulls. The first rig is expected for completion by September 1999.

The second Bingo rig is expected to leave the Dalian Shipyard this month for the Friede Goldman yard with final delivery set for December 1999. Steel has been started on the remaining two hulls and the tow out from Dalian is anticipated for summer and autumn of next year, respectively, with completion slated for mid-2000 on both rigs. The final two rigs also have an option to become future candidates for FPSO's.

These will be the first rigs of Ocean Rig's deepwater fleet. An agreement for the marketing and operation of the first two rigs has been entered into with Sedco Forex. Each rig is expected to cost $300 million.

Pride International

Pride International is the leader in new construction with three drillships and six semis on order. Pride has two drillships based on the Gusto 10,000 design - the Pride Africa and Pride Angola, both dynamically positioned. The Pride Africa is contracted to Elf Angola for five years plus two years option. Construction is taking place at the Hyundai MIPO yard in South Korea. The ship is not 100% new construction; it is utilizing the midship section of the ex-Anadyr vessel. Presently, the blocks are being mated in drydock. Delivery is set for May 1999.

Pride Angola is also contracted to Elf Angola for five years plus two years option and under construction at the Hyundai MIPO yard. The vessel is 100% new construction and is being carried out according to plan. Delivery is scheduled for October 1999.

The third DP drillship is the Navis Explorer 1 of the Navis design. Construction is being done at the Samsung Heavy Industries yard in South Korea and is proceding according to plan. Delivery is set for March 2000.

The six semis are of the Amethyst 2 design and will all be DP. Fabrication began on the first two, Amethyst 2 and Amethyst 3, in July at Davie Shipyard in Quebec, Canada. The rigs are contracted to Petrobras for five years and were due for delivery in October 1999. However, the Davie Shipyard recently declared bankruptcy and Pride is looking at alternative solutions to complete construction.

The Amethyst 4 & 5 are also contracted to Petrobras for six and eight years, respectively. Fabrication began in September on Amethyst 4, and will begin in November on Amethyst 5, at TDI-Halter's yard in Pascagoula, Mississippi. Delivery is projected for December 1999 and February 2000, respectively.

Petrobras also has contracted for the Amethyst 6 and Amethyst 7 semis for seven years. Fabrication will begin on Amethyst 6 next month and on Amethyst 7 in December at the Daewoo South Korea shipyard. Delivery will be in February and March of 2000.

R&B Falcon

R&B Falcon holds the second place slot in deepwater construction. One drillship has recently been completed, and seven more vessels are underway and two are planned.

The Deepwater Pathfinder drillship was christened last month at the Samsung Heavy Industries yard in South Korea and the vessel is enroute to its first contract with Conoco in the Gulf of Mexico. The drillship is equipped to work in full DP in 7,500 ft of water. Drilling should begin by the second week of December.

Following the Pathfinder is the identical Deepwater Frontier. The Deepwater Frontier is under construction at the Samsung yard in South Korea and is reportedly ahead of schedule. The vessel floated out of drydock on July 18, 1998 and is presently along quayside. Construction re mains on schedule. Sea trials will begin in mid-December, with DP trials to commence shortly thereafter. The christening is set to take place on January 29, 1999, followed by load out of riser, drilling tubulars, and other equipment in Korea. The Frontier will then take a 25-day transit to New Zealand and will commence the initial drilling program with Conoco Northland Limited. The initial program is for six to nine months, after which the rig should relocate to either the Gulf of Mexico or West Africa.

The third drillship is the newly named Deepwater Millennium, also under construction at the Samsung yard. Construction is ahead of schedule and progressing in the drydock. The vessel is scheduled for delivery on May 10, 1999. Transit is planned for the Gulf of Mexico for the initial contract with Statoil, slated to commence in early July 1999.

Delivery dates of two of the drillships were advanced. The Frontier was originally scheduled for delivery at the end of March 1999 and was advanced to the end of January 1999. The Millennium was advanced three months from an original date of August 1999 to May 10, 1999.

The company is also in the construction stage on four Peregrine drillships with two more planned. The Peregrine IV is under construction in Singapore and is set for delivery in February and will work for Petrobras in Brazil until February 2005. Peregrine VI is also under construction in Portugal with delivery set for December 1999. The initial contract is with Mobil/Phillips in the Gulf of Mexico until December 2002.

Peregrine VII is under construction in the UK. Delivery is scheduled for March 2000. Amoco has the initial contract for work off Angola until March 2003. Peregrine VIII is under construction in Portugal. Delivery is for December 1999 and will work for Texaco off West Africa until December 2002.

R&B Falcon is also planning conversion projects of the Peregrine IX and X to DP drillships slated for 10,500 ft water depths.

The company also has one newbuild semi under construction. First steel has been cut for the RBS-6 and the company is in the process of finalizing the detail design. Construction is taking place at the Hyundai shipyard in Ulsan, Korea. Shell has committed for the initial contract of five years for the Gulf of Mexico. The rig is on schedule and should be completed in November 1999.

Rigco

Rigco, a division of Tatham Offshore, is still in the planning stage of newbuilding a Friede & Goldman Millennium class, harsh environment semi. However, the company is holding off construction until a contract is secured. The rig, if given the go-ahead, will be built at the Friede & Goldman Newfoundland yard.

Saipem

Saipem has one newbuild and one conversion underway. The engineering on the newbuild Saipem 10000 drillship has been completed and construction is underway at the Samsung Heavy Industries yard in South Korea. The ship will be capable of operating in excess of 10,000 ft in full DP. Completion is set for second or third quarter of 2000 when it will go to work for Agip for five years, with a two-year option for an additional two years.

The second vessel is the S.S.D.V. Scarabeo 7, a conversion project to a 4,000 ft capable semisubmersible. Most of the structural work has been completed and the topsides are currently under construction at the Tusla yard in Turkey. Delivery is projected for May of next year. The S.S.D.V. Scarabeo 7 will initially work for Agip on a two and a half year contract.

Both rigs are said to be on schedule and on or under-budget.

Sedco Forex

Sedco Forex currently has three deepwater rigs on the books for the future. All three are based on the Sedco Express semisubmersible design. The first two rigs, the Sedco Express (yet to be named), and Sedco Energy, are currently under construction at the DCN Shipyard in France and will be delivered in the fourth quarter of 1999.

The unnamed Sedco Express will initially work for Elf off West Africa upon completion. Sedco Energy is contracted to Texaco for the Gulf of Mexico. Both rigs are rated at water depths of 7,500 ft.

The third semi, the Cajun Express, is being constructed at the Promet Shipyard in Singapore and will be delivered in the first quarter of 2000. The rig will be rated to 8,500 ft water depth and will work for Marathon in the Gulf of Mexico.

Smedvig

Smedvig has recently reduced its newbuild construction plans from three vessels to two. The company was jointly building two drillships (with Navion) that were converted multiphase shuttle tankers - the West Navion I and II. However, due to over $400 million in cost overruns and delivery date delays, Smedvig, Navion, and operator Shell, have decided to terminate the construction, the drilling contract, and the contracts for delivery of drilling modules and equipment of the West Navion II.

Shell Deepwater Development, which had contracted for the initial five-year drilling contract for the vessel, consented to the termination. The drillship was set for delivery in the fourth quarter of 1999 and delivery of equipment and drilling modules were still in the early phase. Smedvig will assume the cost of the $90 million loss.

The termination, however, is not expected to impact the progress of the West Navion I drillship currently at 70% completion in the Samsung yard. Delivery has been delayed from the original third quarter 1998 to the second quarter 1999. The drillship will work for Statoil upon completion in the North Sea.

Smedvig also has the West Future II deepwater semi currently under construction. The rig is being built at the Hitachi yard in Japan and will be delivered in January.

Transocean

Construction has begun on Transocean's Discoverer Spirit and Discoverer Deep Seas drillships at the Astano Shipyard in Spain. Upon completion both rigs will work on five-year contracts. The Discoverer Spirit will work for Unocal and the Discoverer Deep Seas will work for Chevron, both in the Gulf of Mexico. Steel is presently being cut for both ships and some pre-fabrication of the hull in underway. The rigs are ahead of schedule and delivery is set for February and June of 2000, respectively.

The Discoverer Spirit will initially be equipped to work in 8,500 ft of water and the Discoverer Deep Seas will be capable of 8,000 ft. Both will be able to work in 10,000 ft of water with additional riser.

Transocean's third vessel - the Discoverer Enterprise - is currently undergoing final outfitting at the Ingalls Shipyard in Pascagoula, Mississippi after being delivered from the Astano yard in Spain in August. The lifts were being done at the time of this report. The vessel is expected to undergo sea trials in December and begin its five-year contract with Amoco in the Gulf of Mexico in January.

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