Boosting Value Creation in the Norwegian Offshore Sector
Writer: Morten Helliesen, Media Advisor, North Sea Rigs
Project Manager: Josh Hyland
Demanding times in the petroleum sector have brought challenges, not least in the rig industry where scheduled projects have high capacity and complexity. Moreover, the industry is suffering from aging equipment that no longer meets the demands and requirements of offshore oil companies who are looking for a high level of efficiency and safety, while ensuring maximum uptime at a competitive cost.
North Sea Rigs is facing these challenges head-on with three new rigs soon to be introduced to the market. Optimised for the mid-water segment, the North Dragon, Beacon Atlantic and Beacon Pacific rigs are suitable for the development, maintenance and drilling of new wells in the Norwegian offshore sector; as well as other strategic offshore oil hubs globally. The Company’s new rigs have arrived just in time to answer the industry needs, accompanied by state-of-the-art facilities to ensure operations are efficient and cost-effective.
“Despite the market situation, the offshore industry still offers multiple opportunities. A high number of new wells are needed to drill proven petroleum reserves, in addition to wells designed to ensure enhanced recovery of already existing fields. From this perspective, the new rigs are a key tool in order to achieve maximum value creation on the Norwegian Continental shelf (NCS),” says North Sea Rigs’ Managing Director (MD), Stephen Adshead.
With the goal to make offshore projects as robust as possible for decades to come in a bid to future-proof both the Company and industry practices, North Sea Rigs is working closely with oil companies to meet their exacting requirements and wishes; including coordinating on the rig design as much as possible.
“We are focused on delivering the most suitable rigs in the market; rigs with customised drilling facilities, hull, size and motion characteristics; providing efficiency and versatility to offshore operations. In short, a total service solution that makes for an adaptable rig,” says Adshead.
Chair of the Board, Heidi Baugstø further emphasises: “We are confident that the Company’s new rigs encompass the technology, efficiency, safety and cost-competitive factors that oil companies require in the long-term.”
Replacing old rigs
It is a known fact that many aging oil rigs operating in the Norwegian offshore market – as well as other global refining hotspots – are approaching the end of their life. Adshead offers: “If we are to succeed in extending the lifetime of mature fields, we need to react appropriately and direct more attention to long-term considerations, such as efficiency and costs. The new rigs address this concern.”
Having already completed and christened the first of its three new rigs, North Dragon, in November, 2015 – which went on to complete a successful drilling trial earlier this year – North Sea rigs has focused its attentions on the completion of Beacon Atlantic and Beacon Pacific; due for completion at the end of 2017. The rigs are currently under construction at CIMC Yantai Raffles Offshore Shipyard in China, a leading North Sea Rigs stakeholder.
One of China’s largest offshore yards, Yantai Raffles specialises in semi-submersible rigs, jack up-rigs and specialised vessels for offshore operations, and since 2001, has delivered a large number of ships and offshore installations for customers and projects worldwide.
“CIMC Capital is a leading player working closely with many international businesses and has a workforce of 60,000, who operate across its strategic global locations. The Company continues to strongly support North Sea Rigs’ development and is a proud stakeholder. A strong partnership on the owner side is reassuring, particularly in times when the market is demanding change,” the MD details.
The same strong commitment is felt throughout North Sea Rigs’ longstanding partnerships, especially those involved in the rigs’ technological solutions; which bear the mark of Norwegian and international knowhow and experience. “Dynamic positioning equipment is supplied by Kongsberg, while Siemens is responsible for the electrical installations onboard. Engines and winches come from Rolls-Royce, while National Oilwell Varco is behind the drilling package,” he adds.
Leveraging a team of specialist experts and industry knowhow, North Sea Rigs’ latest newbuilding drilling rigs are testament to the Company’s continuous improvement and monitoring strategies deployed over the years. From hull design to motion characteristics, the Company has spent decades refining aspects that serve to limit the impact on operational efficiency and uptime. Costs are closely monitored throughout the development process – from planning and building to onboard equipment and technology – all without sacrificing quality.
“Even though exact figures cannot be stated at this point, we believe that adopting such modern rigs as these may lead to a 20-25 percent cost reduction in some areas,” Adshead emphasises.
Thanks to proactive marketing efforts in the local Norwegian offshore and international markets – despite the current market challenges – North Sea Rigs’ management is taking a positive view of winning contracts for the new rigs.
“In times like these, the ability and willingness to think long-term is particularly important. It goes without saying that being backed by owners who are capable of fulfilling this vision and remain committed to a long-term future in the rig market is a decisive factor,” Adshead and Baugstø conclude.