VESSELS, RIGS, UPGRADES

David Paganie, Houston

Rig construction

At print, 96 offshore drilling rigs were under construction, according to industry statistics. And the influx of new orders, upgrades, and reactivations continues. Jurong Shipyard secured contracts for a newbuild jackup and two semisubmersible upgrades. The shipyard won a $165.5-million contract from JackInvest I Pte. Ltd. for construction of a Baker Marine Pacific Class 375 jackup.

Construction is expected to begin in May 2006 with delivery by December 2008. The rig will be equipped with capacity to drill wells to 30,000 ft in up to 375 ft of water.

Jurong also signed an agreement with Noble Drilling to undertake conversion and outfitting of two of its semisubmersible hulls,Noble Danny Adkins and Noble Bingo 9000 Rig 4. A firm contract is expected to be finalized by 3Q06. Danny Adkins will undertake a four-year commitment with Shell in the Gulf of Mexico following its scheduled delivery from Jurong in 1Q09. The semi will be fitted with capacity to drill to a total depth of 35,000 ft.

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Transocean’s semisubmersible,C. Kirk Rhein, Jr. is undergoing a reactivation program in preparation for an upcoming commitment with Reliance Industries Ltd. The rig - idle in the GoM since March 2002 - is scheduled to complete its $38 million reactivation (includes mobilization cost) in time for a December 2006 start on its two-year contract offshore India.

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Keppel picked up contracts for three upgrades and two newbuilds. The shipyard secured a $102-million commitment from Diamond Offshore to upgrade the semisubmersible,Ocean Monarch. The rig is scheduled to be operationally ready in 4Q08.

The Victory-class semisubmersible is being upgraded with capacity to operate in 10,000 ft of water in a moored configuration.

Keppel secured a series of upgrading contracts worth a total of $140 million from Transocean as well. One of the upgrades is being carried out at Keppel’s yard in Singapore with delivery scheduled in May 2007 and the other at Keppel Verolme in Rotterdam with an estimated delivery date in October 2007. Each contract calls for improvements to a Sedco 700-series semisubmersible.

Keppel’s workscope for both vessels includes conversion to full DP-mode with capacity to conduct drilling, completion, and workover operations in 2,000 m of water.

Keppel is building a jackup under a $180-million contract for Mercator Lines Ltd. The company’s first jackup is scheduled to be delivered in 1Q09. The rig is being built based on Keppel’s KFELS B Class design. It will come equipped with capacity to drill to a total depth of 30,000 ft in up to 350 ft of water, upgradeable to 400 ft.

Keppel picked up a newbuild order from A.P. Moller - Maersk, as well. The contract is worth S$415 million. Under the agreement, the semi will be built based on the DSS-21 design, co-developed by Keppel’s Deepwater Technology Group.

The rig will be equipped with a DP system, which can be attached to a prelaid mooring system in up to 10,000 ft of water. Delivery of the semi is expected in 1Q10. Meanwhile, Awilco exercised an option with PPL Shipyard Ltd. to build a jackup capable of drilling to 30,000 ft total depth in up to 375 ft of water.

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Ezra Holdings Ltd. and KS Energy established a 50/50 joint venture to acquire and own a new self-propelled jackup. The rig is under construction at an unidentified shipyard in North America with delivery expected by Aug. 31, 2007. It will then undertake a three-year contract with a two-year option in the GoM.

FPSO demand

In today’s FPSO market, it is a pre-requisite to have guaranteed access to a suitable vessel to be considered as a serious bidder, says Hugo Heerema, president of Bluewater Energy Services B.V.

Accordingly, Bluewater purchased the MTHanne Knutsen tanker from Knutsen OAS Shipping AS for future conversion into an FPSO. The DP2 vessel, built in 2000, is fitted with capacity to store 860,000 bbl of oil. Bluewater says it has already nominated the vessel as a candidate in several bids which are under evaluation.

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Bibby Offshore and Alliance Marine Services have entered into a global support agreement with FPS Ocean to own and operate FPSOs. FPS Ocean recently purchased the first vessel,Nordic Laurita, to be operated under the agreement. The 68,000-dwt tanker will be converted into an FPSO with capacity to process 40,000 b/d and store 525,000 bbl of oil.

The partnership will focus on opportunities in the North Sea, West Africa, Brazil, and Southeast Asia.

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Nexus Floating Production Ltd. has completed a $130-million private placement for investment in its first newbuild FPSO. The company plans to build, own, and operate a fleet of FPSOs.

Nexus entered into turnkey contracts with Samsung and APL for work on the FPSO. Samsung will deliver the unit’s hull and topsides and APL will supply the turret.

APL, who recently acquired a 40% interest in the company through a $52-million investment, will deliver its STP 5000 turret, which features connect and disconnect capability for rapid deployment and hurricane management. The vessel is scheduled for delivery from the yard in June 2009. An option for a second unit with Samsung has been secured as well.

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Chevron Frade LLC has signed a letter of intent with Single Buoy Moorings Inc. to deliver theFrade FPSO. Under the agreement, the parties will execute a lump sum EPCI contract covering the provision of the FPSO based on the conversion of the VLCC Lu San taken from SBM’s inventory.

The FPSO will be built with capacity to handle 100,000 b/d of oil, 106 MMcf/d of natural gas, and 150,000 b/d of water. It will also be fitted with an internal turret capable of accommodating up to 33 risers. The vessel is scheduled for installation in 1,080 m of water on the Frade field offshore Brazil in 2Q08.