Archives for posts with tag: Semi Subs

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.

OIM_07Over the past decade the number of offshore accommodation units has increased by 125%. At present, Floating Accommodation units (Vessels and Semi-Submersibles) account for just 18% of the total 225 active offshore accommodation units, whereas Accommodation Jack-ups and Barges account for 10% and 62% respectively. However, Floating Accommodation vessels represent 75% of the current orderbook for this fleet. So what are the reasons behind this counter-composition in the offshore accommodation sector?

The Graph of the Month displays the size of the orderbook relative to the active fleet and also average berth capacities for each structure type. In all cases, average berths are higher for units on order compared to those in service, illustrating the current demand for high capacity units.

Move to Deep Water

Barges and Jack Ups are limited to shallow-water operations and are typically capable of accommodating up to 300 people. Both structure types feature relatively small orderbooks compared to the active fleet size, with the Barges orderbook representing just 6% of the active fleet. Meanwhile, the Floating Accommodation sector includes the largest average berth capacities (400+ passengers) and features an orderbook that represents 51% of active units. Vessels and Semi-Subs are relatively expensive to construct and operate, but are capable of operating in deep-water, harsh environment settings.

Contrasting Contracting

Contracting for Barges peaked in 2007, when 27 units were ordered. This was followed by a sharp decline in activity with the onset of the economic downturn in 2008. During the period 2005-08 an average of 17 contracts per year were placed for Accommodation Barges, compared to just 4 per year in 2009-12. Conversely, the floating sector saw contracting increase from an average of 3 units per year for 2005-08 to 4 per year in 2009-12, with 9 placed in 2012 and 5 in 2013 to date. The introduction of specialist offshore accommodation operators in recent years has changed the nature of contracting for Floating Accommodation units. Prior to 2011 all floating units had been converted from other offshore structure types. However, companies such as Prosafe, Floatel International and Edda Accommodation have since invested in newbuild units, with the aim of developing high-specification fleets, capable of operating in all conditions. At present newbuilds make up 86% of units on order in the Floating Accommodation sector.

Accommodating Further Demand

The accommodation unit orderbook is now heavily weighted towards floating units, since steady demand for shallow-water units is satisfied by the existing fleet. Consequently, there has been minimal need to order Jack-up or Barge units in any numbers. On the other hand, demand for deeper water floating accommodation solutions has increased. Utilisation of existing floating units is high and charter rates in the North Sea have increased by 50% or more in the last three years. Accordingly, operators have contracted high-specification deep-water units in response, leaving this offshore structure type primed for rapid fleet expansion.