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Pacific Drilling Extends Option for 8th Drillship

Pacific Drilling S.A.  has reached an agreement with South Korea’s Samsung Heavy Industries to extend an option to construct an eighth ultra-deepwater drillship until January 18, 2013, on the same commercial terms, including delivery scheduled for the first quarter of 2015.

Pacific Drilling currently operates four recently delivered drillships under customer contract and has three drillships under construction at Samsung, two of which are under customer contract.

Pacific Drilling Extends Option for 8th Drillship| Offshore Energy Today.

South Korea: Samsung Yard Bags $ 600 Mln UDW Drillship Order

Seadrill has entered into a turnkey contract to build a new ultra-deepwater drillship at the Samsung yard in South Korea. The project value price is estimated to be around US$600 million (including project management, drilling and handling tools, spares, capitalized interest and operations preparations) with tail-heavy payment terms payable upon delivery, which is scheduled within the fourth quarter 2014.

Delivery is scheduled for the fourth quarter 2014. In addition, Seadrill has agreed a fixed price option to build a further drillship at the yard, with delivery in the first quarter 2015. With the current strong demand there is limited availability of rigs in 2014 and Seadrill believes it is likely that the option will be exercised and is currently discussing details of upgrades of that unit.

The drillship will be of the same design as the existing six drillships under construction at Samsung and 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 and West and East Africa. Also, these units will be outfitted with seven ram configuration of the blowout preventer (BOP) stack and with storing and handling capacity for a second BOP.

Yard costs are currently at very attractive levels. This together with the delivery time in 2014, the strength of the ultra-deepwater market and Seadrill’s proven track-record of taking delivery on time and on budget makes this into an investment which is likely to deliver an excellent return to our shareholders.

Seadrill’s construction program now totals 19 units, including 7 drillships, 2 harsh environment semi-submersibles, 5 tender rigs and 5 jack ups. In addition the Company has fixed priced options for three ultra-deepwater/harsh environment units.

The initial installments for the new drillship will be funded by liquidity from the recent US$1 billion bond offering.

Chairman of Seadrill Limited John Fredriksen says, “We have a unique environment where both daily rates and contract duration are increasing to new highs, while yard prices remain low due to the overcapacity in the shipyard industry. This presents an excellent investment opportunity under which we can continue to aggressively grow Seadrill. The new ordering has been evaluated up against several M&A and asset proposals but the Board has concluded that organic growth through contracting new buildings at attractive prices is likely to give higher long-term return to shareholders. The deepwater drilling industry is transforming from an exploration to a development industry. Such a transformation will trigger a significant increase in the need for the drilling of production wells in order to connect the fields that have been successfully explored in the recent years.”

Fredriksen continued: “Seadrill is best positioned within the drilling industry to meet this tightness. We have in total nine ultra-deep/ harsh environment units for delivery in 2013 – 2015 plus options for an additional three. Two of these units have already been employed on long-term contracts. We are currently in specific discussions regarding attractive long-term employment opportunities for a majority of the remaining firm units. Clarification around these fixtures should be expected in the months to come. The Board has in recent press releases expressed that they are confident that an attractive financing package can be arranged for the new building program. This situation has further improved in the recent months, driven by a well oversubscribed bank financing, good progress on the export financing side as well as the successful trading of the new US$1 billion five-year unsecured note. With a total order backlog in excess of US$20 billion which is likely to increase further in the months to come the Board is confident that the new ordering can be financed without raising additional equity and will contribute positively to future valuation as well as dividend capacity. Seadrill will continue to monitor opportunities in the new building market including the possibilities to declare the existing three options. The target is to continue to grow Seadrills organization, fleet and earnings potential in an optimal and dynamic way. The Board is increasingly excited about the strength of the market and the way Seadrill is exposed to this operationally and financially.”

Shipbuilding Tribune – South Korea: Samsung Yard Bags $ 600 Mln UDW Drillship Order.

Pacific Drilling Orders Kongsberg IMS System for its Drillship

Pacific Drilling Orders Kongsberg IMS System for its Drillship| Offshore Energy Today

Kongsberg Maritime will deliver a sophisticated new Information Management System (IMS) as part of a ‘Full Picture’ Integrated Automation System (IAS) delivery to the Pacific Drilling owned Samsung 12000 design dynamically-positioned drillship, Pacific Santa Ana.

The IMS, which will be shown on the Kongsberg Maritime stand at ONS is a new development, which uniquely, facilitates consolidation of all control system data into a single, role-based secure web-portal. In practice, the IMS enables enhanced information sharing and better insight into operations for offshore and shore-based teams. This will result in improved decision support and safety of operations in addition to better troubleshooting of systems on board, maintenance planning and a reduced need for service personnel aboard service vessels.

Based on a suite of integrated applications offering improved information management and sharing possibilities, the new Kongsberg Maritime IMS is a modular system with a highly scalable infrastructure, enabling it to be deployed to very specific operational requirements. The Pacific Santa Ana delivery features a datalogger covering all datasources on board the drilling rig and replication of data to an onshore fleet database.

All data can be accessed in a role based web portal for offshore and onshore users. The core application is the user-defined dashboard in the web portal, which allows users in different roles to customise their views according to their specific needs and job roles. Uses for this application range include domain-specific information views and management fleet KPI views.

The new Kongsberg maritime IMS will join the already installed Kongsberg Maritime K-Pos Dynamic Positioning, K-Chief 700 automation, K-Safe safety system and K-Thrust thruster control already installed. The Pacific Santa Ana commenced drilling operations in the U.S. Gulf of Mexico in Spring 2012 under a 5 year contract with a Chevron subsidiary. The IMS project started at the beginning of April 2012 with a Factory Acceptance Test at Kongsberg Maritime in June. The Customer Acceptance Test is at the end of August. The system is expected to be fully operational during September 2012.
Press Release, August 28, 2012

Pacific Drilling Orders Kongsberg IMS System for its Drillship| Offshore Energy Today.

Norway: Seadrill Negotiating USD 1.16 bln Gig for West Polaris Drillship

Seadrill, one of the world’s largest drilling contractors, has announced it is in advanced discussions regarding a new five-year contract for the drillship West Polaris.

This new contract will start in direct continuation of the existing assignment which is scheduled to be completed in October 2012. The potential contract revenue for the five-year period is approximately US$1.16 billion. A final agreement is expected within July 2012.

The Samsung-built ultra-deepwater drillship was delivered to Seadrill in 2008.

Source

Pacific Drilling Receives LoA for Pacific Sharav Drillship

Pacific Drilling Receives LoA for Pacific Sharav Drillship| Offshore Energy Today

Pacific Drilling S.A., a fast growing company dedicated to becoming the preferred ultra-deepwater drilling contractor, has received a letter of award for the Pacific Sharav drillship, revealed the company’s CEO Chris Becket.

CEO Chris Beckett commented on the increasing demand for ultra-deepwater units: “During the early part of 2012, demand for ultra-deepwater drillships continued to strengthen, as demonstrated by the acceleration in multi-year inquiries and contract awards with increasingly higher dayrates. We expect to see market demand exceed supply well into 2014.”

He added: “In this favorable market context, the Pacific Sharav received a letter of award from a major oil company for a long term commitment. We expect to provide more details on this commitment in the coming weeks. These positive market dynamics supported our decision to order a seventh drillship, scheduled for delivery in May 2014.”

Construction of the Pacific Sharav started in March 2012 at Samsung Heavy Industries in South Korea. Delivery of the rig is expected in September 2013. The vessel, of Samsung 12000 design, will be capable of operating in 12,000 ft water depth and equipped for 40,000 ft drilling depth. The ship will be able to accommodate a crew of 200.

Pacific Drilling’s fleet of seven ultra-deepwater drillships will, once completed, represent one of the youngest and most technologically advanced fleets in the world. The company currently operates four recently delivered drillships and has two additional drillships under construction and one on order at Samsung.

During the first quarter of 2012, the company invested $102 million in the construction of the fleet, including the initial payment for its seventh drillship.

“We estimate the remaining capital expenditures for our committed drillships at $1.6 billion,” read the company’s statement.

Source: Pacific Drilling Receives LoA for Pacific Sharav Drillship| Offshore Energy Today.

Pacific Santa Ana Drillship Arrives in U.S. Gulf of Mexico to Work for Chevron

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Chevron Corporation  announced that the Pacific Santa Ana, a deepwater drillship built to Chevron’s specifications, has arrived in the Gulf of Mexico to work for Chevron under a five-year contract. Pacific Santa Ana is the first drillship designed with the capacity to perform dual gradient drilling (DGD).

“Pacific Santa Ana will enable us to demonstrate dual gradient drilling, which has the potential to change the way deepwater wells are drilled,” said George Kirkland, vice chairman, Chevron Corporation. “This new process builds on our record of technology leadership in deepwater.”

The drillship, build by South Korea’s Samsung Heavy Industroes, is an upgraded Dual Activity Samsung 12000 design dynamically-positioned drillship capable of operating in moderate environments and water depths up to 3,657 m (12,000 ft) using 18¾” BOP and 21” OD FT-DGD drilling riser and equipped for single and/or Dual Gradient Drilling (DGD)

“The addition of Pacific Santa Ana as Chevron’s fifth drillship in the deepwater Gulf of Mexico demonstrates our long-term commitment to developing America’s energy resources,” said Gary Luquette, president of Chevron North America Exploration and Production Company. “We are bullish on the Gulf, where robust energy exploration and development is vital to our nation’s economy and energy security.”

Unlike conventional deepwater drilling, which uses a single drilling fluid weight in the borehole, dual gradient drilling employs two weights of drilling fluid – one above the seabed, another below. This allows drillers to more closely match the pressures presented by nature and effectively eliminates water depth as a consideration in well design. DGD also allows drillers to more quickly detect and appropriately react to downhole pressure changes, which can enhance the safety and efficiency of deepwater drilling operations.

Pacific Santa Ana is equipped with a DGD riser, a mud lift pump handling system, six mud pumps – three for drilling fluid and three for seawater – extensive fluid management system enhancements and more than 72,000 feet of DGD-related cables. After additional equipment is installed and tested, Pacific Santa Ana will be used for exploratory and development drilling in the deepwater Gulf of Mexico.

Source

Strong Demand for UDW Drillships Spurs Seadrill to Order One More from SHI (South Korea)

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Seadrill continues to see strong demand for modern ultra-deepwater (UDW) drilling rigs driven by high oil prices and large deep-water discoveries and increased development drilling. Specific interest, mainly from operators in West Africa and the Americas, demonstrate a trend towards higher day rates and longer term contracts.

With yard costs at very attractive levels and Seadrill’s proven track record with respect to successful new build construction the Company today announced the order of a sixth drillship from Samsung Heavy Industries (SHI) with delivery in the second quarter of 2014. The expected total project cost is less than USD600 million, in line with the 5 units under construction and with delivery in 2013 and 2014. The yard contract was originally between a party related to Seadrill’s major shareholder Hemen Holding and Samsung, as part of a larger shipyard deal, but Seadrill has been given the right to take over the contract at original terms.

Seadrill’s current new build program now includes 17 units: 6 ultra deep-water drillships, 1 harsh environment semi submersible, 5 tender rigs and 5 jack ups, all to be delivered in the period from Q4 2012 to Q1 2015. In addition, Seadrill has received a fixed price option for a further ultra deep-water drillship. The six drillships under construction are of the same design and 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 and West and East Africa. Also, 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.

CEO of Seadrill Alf Thorkildsen says:

“With the available capacity in 2013 and 2014 Seadrill is uniquely positioned among its peers to take advantage of strong demand for drilling services with high dayrates and longer charter contracts. We will continue to aggressively build Seadrill’s earnings and further expansion of the building program is expected in the months to come. Together, these developments provide for continued value creation and an increased dividend capacity.”

Source

ENSCO Orders Drillship with Retractable Thrusters!?

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By Rob Almeida On April 6, 2012

At first it looked like just another drillship order.

Samsung Heavy wins a $645 million order to build a DP3 drillship for ENSCO, however buried in the middle of the press release read:

New features on ENSCO DS-8 include retractable thrusters, enhanced safety and environmental features…

Wait…Retractable thrusters?!

I talked to ENSCO yesterday and they noted that this new feature was a Rolls-Royce design, and that by retracting the forward thrusters, it increased the efficiency of the vessel while in transit while also reducing the overall maintenance burden.

Most importantly however, this new feature will help to reduce down time.  At an average day rate of over a $500 thousand per day, any investment that can keep these rigs up and working longer is money well spent by the contractor and anyone who’s ever had to switch out a thruster knows that it’s not a snap of the fingers… it takes many costly hours and is, to be quite frank, a pain in the ass.

Besides having retractable thrusters, the ENSCO DS-8  has other unique features such as below-main-deck riser storage, triple fluid systems, offline conditioning capability and enhanced client and third-party facilities.

Storing upwards of 12,000 feet of 21″ heavy gauge steel riser on deck presents a significant vessel stability issue, not to mention all the associated drill pipe and casing.  Considering this rig may very well be destined for the arctic and the associated surface area of this pipe, this stability issue could be compounded significantly under ice-loading conditions.  Under these circumstances, storing the riser in a cargo hold below the main deck, is likely a smart move.

Consistent with the previous five Samsung ultra-deepwater drillships ordered since 2007, this new drillship is based on the proprietary Samsung GF12000 hull design measuring 755 feet in length and 125 feet in width. It will offer a payload in excess of 22,000 metric tons and a 1,250-ton hoisting system. The rig’s design and capabilities include numerous features that increase operating efficiency. Primary to these capabilities are enhanced and redundant offline tubular stand-building features and a 165-ton active heave compensating construction crane, allowing for the deployment of subsea production equipment without interference with ongoing drilling operations.

The rig, which will be initially outfitted for drilling in water depths of up to 10,000 feet, will be equipped with dynamic positioning in compliance with DPS-3 certification; six-5.5 megawatt thrusters for enhanced station-keeping; expanded drilling fluids capacity; a 15,000-psi subsea well control system with six rams, upgradable to seven rams and/or a second BOP stack; burner boom for well testing; and living quarters for up to 200 personnel.will be built to meet the demands of ultra-deepwater drilling in water depths of up to 12,000 feet and a total vertical drilling depth of 40,000 feet.

Ensco Chairman, President and CEO Dan Rabun said:

An ongoing trend of new deepwater oil and gas discoveries around the globe is creating a high demand for equipment capable of tapping those resources. Our track record of leading safety and deepwater performance increasingly makes us the driller of choice for operators working in complex offshore fields. Our high-grading strategy will ensure that we continue to be equipped to respond to rising customer demand.” The latest EnergyPoint industry survey rates Ensco first in total customer satisfaction among offshore drillers overall and specifically in safety, health and environment performance as well as in deepwater drilling.

This addition to our fleet is in keeping with our strategy of standardization, which streamlines construction, operations, inventory management, training, regulatory compliance, repairs and maintenance,” Mr. Rabun pointed out. “We are very pleased to continue our successful newbuild drillship program with Samsung.

This vessel will be the sixth Samsung DP3 drillship in the Ensco fleet, extending the benefits of Ensco’s fleet standardization strategy. The contract also includes options for two additional drillships of the same design and is scheduled for delivery in the third quarter of 2014.

Ensco’s three active DP3 drillships are currently contracted into 2016 in the U.S. Gulf of Mexico, Brazil and West Africa. A fourth, ENSCO DS-6, is undergoing pre-commissioning modifications in preparation for its first well assignment under a five-year contract with BP. ENSCO DS-7 is scheduled for delivery in the second half of 2013.

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