license to drill : industry trends and rig selection … to drill... · nazery khalid offshore...

Nazery KhalidNazery Khalid

Offshore Drilling Operations Conference Offshore Drilling Operations Conference Kuala Lumpur, 17Kuala Lumpur, 17--18 June 200818 June 2008

LICENSE TO DRILL :LICENSE TO DRILL :INDUSTRY TRENDS AND RIG SELECTIONINDUSTRY TRENDS AND RIG SELECTION

PRESENTATION OUTLINEPRESENTATION OUTLINE

•• World rig market growth. World rig market growth. •• Deepwater : treasures from the deep.Deepwater : treasures from the deep.•• Selection of drill types based on market Selection of drill types based on market

projections.projections.•• Rig market trends. Rig market trends. •• Crystal gazing : Rig market outlook.Crystal gazing : Rig market outlook.

GLOBAL SCENARIOGLOBAL SCENARIO

•• Pressure to find new energy supply leading Pressure to find new energy supply leading to growing demand for rigs.to growing demand for rigs.

•• Rig owners enjoying high day rates.Rig owners enjoying high day rates.•• High revenues for oil majors leading to High revenues for oil majors leading to

more investment in rigs / fleet expansionmore investment in rigs / fleet expansion..•• Emergence of new builders i.e. BOMCO.Emergence of new builders i.e. BOMCO.•• More refurbishment of old rigs.More refurbishment of old rigs.•• 100% utilization rate of deepwater rigs.100% utilization rate of deepwater rigs.

WORLD RIG COUNTWORLD RIG COUNT

311617683432412656678355

2007 2007 **

279238Middle East7358Africa9377Europe380324Latin America

30093043Total18291648USA106470Canada249228Asia Pacific

RegionRegion Apr 2008 Apr 2008 2006 2006 **

Baker Hughes Inc.Baker Hughes Inc.

* * Monthly averageMonthly average

OFFSHORE RIG DAY RATESOFFSHORE RIG DAY RATES

ODSODS--PetrodataPetrodata Inc.Inc.

FLOATERS ACTIVITY BY AREA (end FLOATERS ACTIVITY BY AREA (end ‘‘07)07)

RS RS PlatouPlatou

92%187172World total94%1615Rest of world85%2622Pacific Rim90%3027W/S Africa94%3129S America

89%4540Mexican Gulf / Caribbean

100%3939N Atlantic100%1818Norway

UtilizationUtilizationSupplySupplyDemandDemandAreaArea

JACKJACK--UPS ACTIVITY BY AREA (end UPS ACTIVITY BY AREA (end ‘‘07)07)

RS RS PlatouPlatou

89%400355World total99%140138Rest of world95%6562Pacific Rim93%2725W/S Africa80%54S America

72%12590Mexican Gulf / Caribbean

95%3836N Atlantic100%66Norway

UtilizationUtilizationSupplySupplyDemandDemandAreaArea

FACTORS DRIVING DEEPWATER RUSHFACTORS DRIVING DEEPWATER RUSH

•• Growing global demand for energy.Growing global demand for energy.•• Traditional fields fast exhausting.Traditional fields fast exhausting.•• Declining production & reserves.Declining production & reserves.•• Oil supply jitters.Oil supply jitters.•• Pressure to diversify supply.Pressure to diversify supply.•• Energy economics. Energy economics. •• Technological advent. Technological advent.

DEEPWATER PRODUCTION FORECASTDEEPWATER PRODUCTION FORECAST

www.eia.doe.govwww.eia.doe.gov

RIG SELECTION CRITERIARIG SELECTION CRITERIA

•• Location of drilling activity.•• Depth of water, seabed features & lateral

force at location for offshore drilling.•• Deck requirements.•• Size of field and location of wells.•• Transport of oil requirements.•• Type of drilling i.e. active site drilling,

‘wildcat’ well drilling, scientific drilling.

FIXED PLATFORMSFIXED PLATFORMS

www.ukooa.co.ukwww.ukooa.co.uk

TYPES OF FIXED PLATFORMSTYPES OF FIXED PLATFORMS

•• Conventional fixed platforms•• Compliant towers•• Tension leg platform •• Seastar

CONVENTIONAL FIXED PLATFORMSCONVENTIONAL FIXED PLATFORMS

CONVENTIONAL FIXED PLATFORMSCONVENTIONAL FIXED PLATFORMS

•• Built on concrete / steel legs anchored onto seabed.

•• Deck with drilling rigs, production facilities and crew quarters

•• Structures used : steel jacket, floating concrete & concrete floating steel

•• Economically viable for installation in water depths up to 520m.

COMPLIANT TOWERSCOMPLIANT TOWERS

COMPLIANT TOWERSCOMPLIANT TOWERS

•• Made of narrow, flexible towers with piling foundation.

•• Support conventional deck for drilling and production operations.

•• Can sustain huge lateral forces and deflections.

•• Used in waters with 450-900m depth.

TENSION LEG PLATFORMSTENSION LEG PLATFORMS

TENSION LEG PLATFORMSTENSION LEG PLATFORMS

•• Made of floating rigs held by vertical, tensioned tendons.

•• Tension legs secured on seabed using pile-secured templates.

•• Eliminate vertical movements to the structure.

•• Used in waters of up to 2,000m depth.

SEASTARSEASTAR

SEASTARSEASTAR

•• ‘Mini Tension Leg Platforms (TLP)’• Cost less than normal TLP.•• Can be used as utility, satellite or early

production platforms for deepwater discoveries.

•• Deployed in waters between 200 to 1,100m.

FLOATING PRODUCTION FLOATING PRODUCTION AND SUBSEA SYSTEMSAND SUBSEA SYSTEMS

www.gomr.mms.govwww.gomr.mms.gov

TYPES OF TYPES OF FLOATING PRODUCTION SYSTEMSFLOATING PRODUCTION SYSTEMS

•• SPAR platforms•• Floating production system (FPS)•• Subsea system•• Floating production, storage and

offloading (FPSO) system

SPAR PLATFORMSSPAR PLATFORMS

Classic SPARClassic SPAR Truss SPARTruss SPARCell SPARCell SPAR

SPAR PLATFORMSSPAR PLATFORMS

•• Among the largest platforms in use.• Consist of large cylinders supporting

fixed rig platform.•• Cylinders are tethered by cables and

lines to seafloor.•• Cylinders stabilize platform and allow

movement to absorb hurricane impacts.

FLOATING PRODUCTION SYSTEMFLOATING PRODUCTION SYSTEM

ExxonMobilExxonMobil’’s s KizombaKizomba--A FPS, the worldA FPS, the world’’s largest, used offshore Angolas largest, used offshore Angola

FLOATING PRODUCTION SYSTEMSFLOATING PRODUCTION SYSTEMS

•• Large vessels that can take, process and / or store oil & gas.

•• Moored to locations over long periods.•• Main systems : FPSO (floating

production, storage & offloading), FSO (floating storage & offloading) & FSU (floating storage unit).

SUBSEA SYSTEMSSUBSEA SYSTEMS

SUBSEA SYSTEMSSUBSEA SYSTEMS

•• Used in wells located on the seafloor to transport extracts via riser / pipelines to existing production platform.

•• Moveable rigs are used to drill wells, allowing for a platform to serve many wells over large area.

•• Used in waters up to 2,100m deep.

SEMI SUBMERSIBLESSEMI SUBMERSIBLES

SEMI SUBMERSIBLESSEMI SUBMERSIBLES

•• Mobile structures, some with own locomotion.

•• Can be ballasted up or down by adjusting flooding of buoyancy tank.

•• Anchored by cables during drilling operations or dynamic positioning.

•• Provide excellent stability in deep, rough waters between 180-1,800m.

SUBMERSIBLESSUBMERSIBLES

SUBMERSIBLESSUBMERSIBLES

•• Rarely used.•• Flexible - can be floated to shallow

water locations.•• Ballasted to sit on the seabed at

locations.

MOBILE OFFSHORE MOBILE OFFSHORE DRILLING UNITSDRILLING UNITS

•• Drill ships•• Jack-ups•• Tender-assisted drilling

DRILL SHIPSDRILL SHIPS

DRILL SHIPSDRILL SHIPS

•• Look like ordinary ships but with derricks drilling holes through the hull.

•• Built on modified tanker hull with dynamic positioning outfitting.

•• Anchored or positioned with propellers correcting ships’ drift.

• Often used for drilling exploratory (‘wildcat’) wells and scientific drilling.

JACKUPSJACKUPS

JACKUPSJACKUPS

•• Usually towed to shallow locations and anchored using jack-like legs.

•• Legs lowered to seabed and hull jacked-up clear of the sea surface.

•• Used in waters of depths up to 160m.

TENDER ASSISTED DRILLINGTENDER ASSISTED DRILLING

TENDER ASSISTED DRILLINGTENDER ASSISTED DRILLING

•• Features self-erecting drilling units and tender support vessels.

•• Used in fields with relatively few wells and restrictions on topside weights.

•• Semi-submersible rigs are increasingly used in TAD to reduce platform topsides and jacket weight / cost.

CRYSTAL GAZINGCRYSTAL GAZING

•• Bullish rig market ahead on the back of Bullish rig market ahead on the back of robust oil demand and high oil prices.robust oil demand and high oil prices.

•• More investments for building programs.More investments for building programs.•• More rigs to be deployed in More rigs to be deployed in deepwatersdeepwaters..•• High refurbishment rate of older units.High refurbishment rate of older units.•• Day rates to remain high.Day rates to remain high.•• More focus on risk mitigation and lowering More focus on risk mitigation and lowering

cost of removing / dismantling rigs.cost of removing / dismantling rigs.

CRYSTAL GAZINGCRYSTAL GAZING

•• More orders placed with up and coming More orders placed with up and coming manufacturers in developing countries.manufacturers in developing countries.

•• Rig prices to remain high due to tight yard Rig prices to remain high due to tight yard space, rising steel / equipment prices.space, rising steel / equipment prices.

•• YardsYards--rig owners moving toward option rig owners moving toward option contracts that allow price renegotiation.contracts that allow price renegotiation.

•• Wither the high cost of rig rentals / field Wither the high cost of rig rentals / field development?development?

nazery@mima.gov.mywww.mima.gov.my

THANK YOUTHANK YOU