LICENSE TO DRILL :

INDUSTRY TRENDS AND RIG SELECTION

Nazery Khalid
Offshore Drilling Operations Conference
Kuala Lumpur, 17-18 June 2008
 PRESENTATION OUTLINE

• World rig market growth.

• Deepwater : treasures from the deep.
• Selection of drill types based on market
projections.
• Rig market trends.
• Crystal gazing : Rig market outlook.
 GLOBAL SCENARIO

• Pressure to find new energy supply leading

to growing demand for rigs.
• Rig owners enjoying high day rates.
• High revenues for oil majors leading to
more investment in rigs / fleet expansion.
• Emergence of new builders i.e. BOMCO.
• More refurbishment of old rigs.
• 100% utilization rate of deepwater rigs.
 WORLD RIG COUNT
Region 2006 * 2007 * Apr 2008
Latin America 324 355 380
Europe 77 78 93
Africa 58 66 73
Middle East 238 265 279
Asia Pacific 228 241 249
Canada 470 343 106
USA 1648 1768 1829
Total 3043 3116 3009
* Monthly average
Baker Hughes Inc.
OFFSHORE RIG DAY RATES

ODS-Petrodata Inc.
FLOATERS ACTIVITY BY AREA (end ‘07)
Area Demand Supply Utilization
Norway 18 18 100%
N Atlantic 39 39 100%
Mexican Gulf 40 45 89%
/ Caribbean
S America 29 31 94%
W/S Africa 27 30 90%
Pacific Rim 22 26 85%
Rest of world 15 16 94%
World total 172 187 92%

RS Platou
JACK-UPS ACTIVITY BY AREA (end ‘07)
Area Demand Supply Utilization
Norway 6 6 100%
N Atlantic 36 38 95%
Mexican Gulf 90 125 72%
/ Caribbean
S America 4 5 80%
W/S Africa 25 27 93%
Pacific Rim 62 65 95%
Rest of world 138 140 99%
World total 355 400 89%

RS Platou
FACTORS DRIVING DEEPWATER RUSH
• Growing global demand for energy.
• Traditional fields fast exhausting.
• Declining production & reserves.
• Oil supply jitters.
• Pressure to diversify supply.
• Energy economics.
• Technological advent.
DEEPWATER PRODUCTION FORECAST

www.eia.doe.gov
 RIG 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 PLATFORMS

www.ukooa.co.uk
 TYPES OF FIXED PLATFORMS
• Conventional fixed platforms
• Compliant towers
• Tension leg platform
• Seastar
CONVENTIONAL FIXED PLATFORMS
 CONVENTIONAL 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 TOWERS
 COMPLIANT 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 PLATFORMS
 TENSION 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.
SEASTAR
 SEASTAR
• ‘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
AND SUBSEA SYSTEMS

www.gomr.mms.gov
 TYPES OF
FLOATING PRODUCTION SYSTEMS
• SPAR platforms
• Floating production system (FPS)
• Subsea system
• Floating production, storage and
offloading (FPSO) system
 SPAR PLATFORMS

Classic SPAR Cell SPAR Truss SPAR

 SPAR 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 SYSTEM

ExxonMobil’s Kizomba-A FPS, the world’s largest, used offshore Angola

 FLOATING 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 SYSTEMS
 SUBSEA 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 SUBMERSIBLES
 SEMI 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.
SUBMERSIBLES
 SUBMERSIBLES
• Rarely used.
• Flexible - can be floated to shallow
water locations.
• Ballasted to sit on the seabed at
locations.
 MOBILE OFFSHORE
DRILLING UNITS

• Drill ships
• Jack-ups
• Tender-assisted drilling
DRILL SHIPS
 DRILL 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.
JACKUPS
 JACKUPS
• 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 DRILLING
 TENDER 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 GAZING

• Bullish rig market ahead on the back of

robust oil demand and high oil prices.
• More investments for building programs.
• More rigs to be deployed in deepwaters.
• High refurbishment rate of older units.
• Day rates to remain high.
• More focus on risk mitigation and lowering
cost of removing / dismantling rigs.
 CRYSTAL GAZING

• More orders placed with up and coming

manufacturers in developing countries.
• Rig prices to remain high due to tight yard
space, rising steel / equipment prices.
• Yards-rig owners moving toward option
contracts that allow price renegotiation.
• Wither the high cost of rig rentals / field
development?
 THANK YOU

nazery@mima.gov.my
www.mima.gov.my