Archives for posts with tag: drillship

OIMT01Since the start of 2010, the drillship fleet has grown 98% and the number of semi-subs capable of drilling in >5,000ft of water has grown 45%. This suggests increasing demand for rigs capable of drilling in deep and ultra-deep water, but how much is currently taking place at these depths?

Rigs In The Middle

The Graph of the Month shows known current water depths in which active drilling rigs are deployed. Whilst jack-ups dominate shallow depths, floaters are drilling mostly in “midwater” (500-5,000ft), where 57% of semi-subs and 45% of drillships are currently deployed.
In deeper water (5,000-7,500ft), 19 >5,000ft semi-subs and 33 drillships are known to be currently drilling. However, only 10% of the active drillship fleet and only 1% of semi-subs are currently deployed in ultra-deepwater. Overall, this means that only half of the active drillships and less than a quarter (24%) of >5,000ft semi-subs are currently located in deep and ultra-deep water. Only 4% of the current floater fleet are currently deployed in ultra-deepwater.

Deeper Potential

Although the current active drilling fleet contains over 105 floaters capable of drilling in >7,500ft water depths, the graph shows that only 9 floaters are currently deployed at such depths. The remaining rigs are therefore deployed in water depths much shallower than their specifications allow.

For example, of the 25 rigs in the current active fleet capable of drilling in water depths 12,000ft or greater, only 5 are currently known to be drilling in ultra-deep water. Of the remainder, 8 are in deepwater and 12 are in midwater. Despite the fleet’s ability to drill in ultra-deepwater, present demand is at mid- and deepwater depths.
The newer generations of floating MDUs have additional advantages in terms of technological sophistication (such as secondary derricks or drillfloor automation), which can make them attractive to operators that might not necessarily need their full depth capabilities. This can make them attractive in midwater harsh environments (e.g. in the North Sea).

Floater Flexibility

However, demand for ultra-deepwater drilling is increasing and expected to continue growing. Bearing this in mind, the orderbook for rigs capable of drilling >5,000ft remains strong (16 semi-subs of this ability and 76 drillships are currently on order). As ultra-deep fields are increasingly explored and developed it is anticipated that a greater share of floaters will be deployed in deeper water, maximising their capabilities.

Ultra-deepwater is expected to be the most rapid source of future demand growth for floating MDUs. However, mid/deepwater demand will remain important. As shown, the existing fleet and orderbook is well equipped to cater for this shift. Depths in which floaters are deployed in the future depend on whether there is investment in next-generation specialist midwater floaters, equipped with the technical innovations of recent ultra-deep rigs. Alternatively, operators may prefer to add to rig supply for ultra-deepwater drilling, which will still provide options for deployment in a broad range of water depths if required.

OIM08In 1947, the first offshore oil discovery was drilled out of sight of land. Albeit only 29km away from the Louisiana coastline, and in water depths of just 4.3m, this achievement began an new era of offshore oil production. The movement of offshore operations into deeper and more remote regions has been previously documented by Clarkson Research, and as this trend continues we take a look at how the industry has prepared for this development.

Deeper and Darker

The Graph of the Month shows the trend in the characteristics of all known offshore oilfields against their year of discovery. As the more accessible fields became less available and less productive, companies moved further offshore and into deeper waters. In 1970 the average distance from shore of known oilfields stood at 60km, with the average water depth being 54m. By 2013 the average distance to shore had more than doubled to 134km, and the average water depth was 15 times deeper at an impressive 876m.

As well as increasing average water depths and distance to shore, many newly discovered fields are also in areas designated as harsh environments. Vessels operating in these frontier regions may face adverse weather conditions, longer periods of deployment and greater demand for capacity in order to maximise their efficiency.

Building for Tomorrow

In response to these more challenging requirements, the offshore industry has already altered its contracting preferences. One example of this is the trend in newbuild contracting of PSV vessels. Large PSV (>4,000 dwt) newbuild contracting in 2012 was almost 5 times higher than the number of contracts in 2009. In comparison small PSV (<3,000 dwt) newbuild contracting has decreased by 14% in the same period. The average deadweight of PSV contracted increased by almost 60% between 1990 and 2012, from 2,500 dwt to 4,000 dwt.

Another example of the offshore industry’s response to the increased water depths of newly discovered fields can be seen in the volume of newbuild orders for drillships. At present the number of drillships on the orderbook stands at 80, which is 88% of the current active fleet. In comparison to this the orderbook for Jack-Up rigs capable of drilling up to 300ft is just 13 units, a mere 4% of the existing fleet, highlighting the move from low specification, shallow water drilling units towards higher specification, deep water rigs.

Further Preparations

Whilst newbuilding of higher specification units has increased, some exceptions do remain. For example, ordering of ice class vessels has slowed in recent years despite an increase in Arctic exploration. Whilst this is still a developing sector which could fuel medium-term contracting demand, it is understandable that the recent focus of contracting has been on units intended for warmer waters. This is where the majority of deep water discoveries have occurred, and is the reason the offshore industry is gearing up for remote drilling accordingly.