March 2003

Drilling advances

Jackup newbuild report; IADC deepwater well control guidelines
  Vol. 224 No. 3
Drilling Snyder

Jackup newbuilding report. ODS-Petrodata has published a new strategy study outlining three scenarios for jackup drilling rig attrition and new buildings to 2015. The worldwide jackup market: Scenarios for newbuilding and attrition to 2015 examines the age profile of the current fleet of jackups, provides useful facts and statistics, compares market share, and presents three scenarios for fleet attrition and newbuilding over the next 10 to 12 years. 

The 142-page report was compiled by the company’s research division and adopts a comprehensive examination of trends that are likely to impact rig retirement in the coming years. It is specifically aimed at strategists and decision makers charged with thinking about economic, political and technological issues that affect individual companies. 

“A typical jackup has a useful life of about 25 years, without major upgrades. In 2012, 90% of the fleet will be at least 26 years old compared with only 17% that are this old now. Given that the bulk of today’s fleet was delivered in the early 1980s, the industry will soon face a significant challenge in replenishing its aging equipment,” said Stewart Wiseman, author of the report. For further information, contact: Stewart Wiseman, Editor: Tel: 1 832 463 3031; E-mail:

Pro prognosticator. Who was the best forecaster in the offshore industry in 2002? Lehman Brothers polled who they considered to be the 50 leading experts in the offshore drilling industry in January 2002. They asked for their opinions on four key barometers of the contract drilling industry in 2002. These were:

  1. How many jackups will be ordered in 2002?
  2. How many floating rigs will be ordered in 2002?
  3. How many jackups will be under contract in the Gulf of Mexico at year-end 2002?
  4. How many semisubmersibles will be under contract worldwide at year-end 2002?

The winner and the recipient of Lehman’s award as “the smartest person in the offshore industry” for 2002 is Bob Palmer, long-time Chairman and CEO of Rowan Companies. Unfortunately, Palmer will be retiring from his CEO position this year. Fortunately, he will be replaced by the runner up, also from Rowan, Mr. Danny McNease. Both Bob and Danny will receive appropriate gifts. Their estimates were as follows:

  Key contract drilling indicators  
  1. Jackups ordered 3   4   4  
  2. Semisubmersibles ordered 0   0   0  
  3. Jackups in the Gulf  90   110   95  
  4. Semisubmersibles worldwide  135   145   123  
  Source: ODS-Petrodata, Lehman Brothers  

It should be noted that three of the four jackups ordered during 2002 were from Rowan. However, it is equally notable that Bob Palmer was one of the few that was both moderately bullish on the prospects for the jackup market in the Gulf of Mexico and moderately bearish on the semisubmersible market worldwide. Soon, Lehman will issue the same report for 2003. Good luck.

IADC deepwater well control guidelines. The best-selling IADC Deepwater Well Control Guidelines are now available in an easy to reference, fully searchable CD-ROM. The Guidelines are designed to aid the drilling industry in conducting operations in the deepwater areas of the world, focusing on well planning, well control procedures, equipment, emergency response and training. Recent updates to the Guidelines now include the supplement published in 2000, which covers unplanned disconnects in deepwater drilling, riser margin overview, external loading of BOP equipment and volumetric rating of subsea accumulator bottles. Based on years of experience and studies, the Guidelines provide a basis on which to build future deepwater operations. For more information, contact Jason McFarland at: 1 281 578 7171, or visit the Website at:

Helmerich & Payne rig activity. One of the largest drilling contractors with 75 US land rigs, 12 US platform rigs, and 33 rigs in South America, Helmerich & Payne, Inc., announced in mid-February that it was informed by a major customer that, due to new budget constraints, 12 H&P domestic land rigs would be released after completing their current contracts. The rigs consist of six FlexRig3s, three FlexRig2s, and three conventional land rigs. It was estimated that four rigs would be released within two weeks of the announcement, the rest within seven to 10 weeks. Since release notification, H&P had soon obtained verbal contract commitments from other operators for work to begin immediately following the release of three of the FlexRig3s. 

H&P’s President/CEO, Hans Helmerich commented, “Our FlexRigs have achieved activity rates in excess of 95% since their introduction. Given the recent increased level of bid activity and the schedule of rig release dates, we anticipate that the remaining FlexRigs and conventional rigs should have jobs by the completion of their current commitments.”

Petrobras postpones tendering. Petróleo Brasileiro (Petrobras) has again postponed tenders for building the two drilling platforms P-51 and P-52, valued in excess of US$1 billion; but this time the postponement is indefinite. Petrobras’ new CEO, Jose Eduardo Dutra, said that it will not fix a new date for the tenders, twice delayed before. The company’s tendering process became embroiled in Brazil’s presidential election campaign and was highly criticized by now-President Luiz Inacio Lula da Silva for the state-owned oil company sending revenues and employment outside the country when Brazilian companies were capable of constructing the platforms. 

At the time, Petrobras announced that bidders had requested more time and the deadline was delayed from August to December; then, in December, it was delayed again. In all probability, the platforms will be built in Brazil, as Lula pledged in his election campaign; and Petrobras will probably recast the tendering process to exclude foreign companies. The last platform tender was won by Jurong Shipyard in Singapore, with a bid $14 million lower than that of FelsSetal, a joint venture between Brazilian and Singaporean companies.  WO

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