Category Archives: South Korea

South Korea, is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People’s Republic of China (Mainland China) to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China (Taiwan) to the south. Its capital is Seoul, which is also its largest city.

South Korea: SHI to Build Seventh UDW Drillship for Pacific Drilling

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Pacific Drilling S.A. via its wholly-owned subsidiary last week exercised an option to construct its seventh ultra-deepwater drillship with Samsung Heavy Industries.

We are very pleased to announce the order of our seventh ultra-deepwater drillship,” stated Pacific Drilling CEO Chris Beckett. “The current strength we see in the market for ultra-deepwater rigs well into 2014 led us to act on this opportunity to order a rig with very favorable delivery timing.”

The drillship will have a rated water depth of 12,000 feet, be equipped for 40,000 feet drilling depth, have accommodation for 200 personnel and be equipped to support dual gradient drilling. The total cost, excluding capitalized interest, will be approximately $600 million and delivery is scheduled for May 2014.

Financing for the construction of this rig is expected to be provided by a combination of the company’s recent bond offering, cash flows from ongoing operations and long-term debt.

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100 Million Tons of Ships, Hyundai Heavy Surpasses All Others

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Image courtesy Qatar Gas

The Korea Times and Yonhap news reports today that South Korea’s Hyundai Heavy Industries (HHI) has cumulatively built over 100 million tons of ships over the shipyard’s 40 year history.

No other shipbuilding company in the world has ever built more.

According to the Korea Times,

Hyundai Heavy has delivered a total of 1,805 diverse types of ships, ranging from drilling vessels, LNG or LPG carriers and container ships to submarines and naval ships, to more than 280 ship owners in 49 different countries.

The ships include 510 container ships, 351 oil tankers, 343 bulk carriers and 124 product carriers.

Last month, HHI won orders for 4 liquefied natural gas (LNG) carriers and 1 LNG floating storage regasification unit (FSRU) worth USD $1.1 billion.  The orders included two 162,000 cbm LNG carriers for Golar LNG of Norway and two same-class ships for an unnamed European shipowner.

According to a Dow Jones report in January, HHI’s 2012 annual order and sales targets are up 19.6% and 9.5%, respectively, from its results in 2011, when it booked $25.54 billion in orders and KRW25.2 trillion in sales.

Asian shipyards such as HHI are bracing for challenging times ahead however as current oil prices increase operating costs, a glut of containerships and tankers put heavy downward pressure on freight rates, and newbuild ship financing becomes increasingly more complex for shipowners.

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INPEX Orders USD 2 bln FPSO from DSME (South Korea)

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The second largest shipbuilder in the world, Daewoo Shipbuilding and Marine Engineering, Co, announces that it has received an order to construct a giant Floating Production Storage and Offloading vessel (FPSO).

The order comes from a Japanese oil giant, INPEX and is a part of the company’s Ichthys project, offshore Australia.

Daewoo made the announcement on the Korea Exchange, saying that the estimated worth of the project is $2 billion.

The FPSO will serve for offshore storage and export of condensate from the Ichthys field. The condensate will be transferred from the CPF to the FPSO and, further, it will be exported from the FPSO via a floating loading hose to offtake tankers.

The vessel will also treat and dispose of produced water. It will be located approximately 2 km from the Central Processing Facilitiy and will contain liquid (condensate and water) treatment facilities, living quarters and associated utilities.

South Korea’s shipbuilders have benefited greatly from the INPEX’s Ichthys project. Samsung Heavy Industries Co Ltd has recently received a $2.71 billion order for the construction of an offshore central processing facility (CPF) for the Ichthys project.

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South Korea: Seadrill Confirms Samsung Drillships Contracts

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South Korea’s Samsung Heavy Industries on Friday announced that it had received contracts for the construction of two drillships without revealing who the costumer was. Today, Seadrill, a Norwegian/Bermudan offshore drilling contractor confirmed the deal.

The construction of the drillships is scheduled for completion in the second and third quarter 2014. Total project price per drillship is estimated to be under US$600 million, which includes a turnkey contract with the yard, project management, drilling and handling tools, spares, capitalized interest and operations preparations. Seadrill has also a fixed price option to order an additional drillship for delivery in 2014.

The drillships are of the same design as the three previous dual derrick drillships that Seadrill ordered at Samsung late 2010 and early 2011, with increased water depth, technical capabilities and accommodation capacities. These dynamic positioning drillships will have a hook load capability of 1,250 tons and a water depth capacity of up to 12,000 feet targeting operations in areas such as the Gulf of Mexico, Brazil as well as West and East Africa. In addition, these units will be outfitted with seven ram configuration of the Blow out Preventer (BOP) stack and with storing and handling capacity for a second BOP.

Chairman of Seadrill John Fredriksen says:

Our long relationship with Samsung has given us access to a proven rig design and favourable delivery slots. In combination with attractive global yard prices, this has created an opportunity to continue to organically build Seadrill with very compelling economics. Seadrill will have five new ultra-deepwater rigs scheduled for delivery in the period 2013 – 2014 and four existing units coming off current contracts in the same period. There has already been specific discussions regarding chartering of part of this capacity. We believe the open ultra-deepwater exposure position will serve Seadrill well and create a unique exposure to one of the fastest growing and most profitable energy businesses in the world. We also believe that this open exposure can be used to further strengthen our relationship with fast growing and dynamic oil companies. The recent increase in daily rates for drilling rigs will generate excess cash that can be used for a balanced combination of organic growth and a strong long-term dividend distribution. It is likely that Seadrill’s commitment to tender and ultra-deepwater new buildings will be further increased in the weeks to come.

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South Korea’s Samsung Wins USD 1.1 bln Order for Two Drillships

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Samsung Heavy Industries (SHI), one of South Korea’s “Big Three” shipbuilding companies says it has received an order for the construction of two drillships.

The order’s estimated value is approximately USD 1.1 billion and it comes from a “large-scale” American corporation. According to the contract details posted on the Korea Exchange (KRX), SHI will make the deliveries no later than August 31, 2014.

This has been a fruitful month for Samsung Heavy Industries. On February 13, the company announced it had received the order from INPEX for the construction of an offshore central processing facility (CPF) for the Ichthys LNG project in Australia.

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