strategic review of the asia pacific offshore rigs market
TRANSCRIPT
Strategic Review of the Asia-Pacific Offshore Rigs Market
08th & 09th Nov 2010
Subbu Bettadapura
Associate Director, Energy Practice, Frost & Sullivan
2
Deliveries and Capital Expenditure
Jack-up, Semis, Drill Ships & Tender Rigs Deployment in Asia Pacific
Current Market Scenario
Table of Contents
ContentsContents
Review of FPSOs Markets
Review of Jack-ups, Semis and Drill Ships Markets1
2
Current Market Scenario
Owners & Manufacturers of Rigs
FPSO Operators in Asia Pacific
Strategic Review of the Asia Pacific Offshore Rigs Market
3
Review of Jack-ups, Semis and Drill Ships MarketsCurrent Market Scenario - Crude Oil Prices (Dollars per Barrel)
Oil prices to rise in correlation with the continued global economic recovery
•2010 crude oil prices average: $79 a barrel•2011 crude oil prices average: $84 a barrel
Source: Financial Forecast Center, Frost & Sullivan
4
Current Market Scenario: Asia Pacific – Key Fields
Source: Compiled by Frost & Sullivan
Key Fields on Indian West Coast
Mukta: 80 meters water depthMumbai D-18: 90 metersMumbai EC: 90 metersMumbai CA – 1: 55 metersHeera (B-38 & B-37-B): 50 meters
Key fields in Indonesian Waters
Terang/Sirasun: 150 – 300 meters water depthGendalo: 1,425 metersWest Seno expansion: 953 metersAton: 1,150 meters
Key fields in Malaysian Waters
Kikeh: 1330 meters water depthKikeh Kecil: 1359 metersGumusut/Kakap: 1000 metersKebabangan (SB-J) (Gas): 300 meters
Key fields in Australia
Montara, Puffin SW, Vincent, Van Gogh, Pyrenees and Crux.
Jansz, Jansz SE, Gorgon, Longtom, Maitland and Sole
Key fields on Indian East Coast
D6 (Dhirubhai): 900 meters water depthM Field (Padmavati): 500 metersKrishna-Godavari G-1 AA: 200 to 490 metersTapti South: 20 meters
Deepwater Definition• Deepwater: + 3000 ft (900 m)• Ultra Deepwater: + 7000 ft (2100 m)
ThailandArthit (Block B15A
& B16A)
MyanmarShwe (Block A-1)
China PRCPeng Lai 19-3
Review of Jack-ups, Semis and Drill Ships Markets
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Current Competitive Offshore Rig Utilization by Rig Type
Market Restraints
•Overbuilding at the peak of the last cycle and•Focus on onshore plays due to shale gas boom
Review of Jack-ups, Semis and Drill Ships MarketsCurrent Market Scenario
Rig Type 15-Oct-09Contracted/
Total)15-Apr-10
Contracted/Total)
15-Sep-10Contracted/
Total)15-Oct-10
Contracted/Total)
Drillship 88.60% (39/44) 87.50% (42/48) 76.90% (40/52) 80.80% (42/52)
Jackup 74.70% (254/340) 80.10% (282/352) 76.50% (276/361) 74.70% (271/363)
Semisub 78.60% (125/159) 83.40% (136/163) 83.80% (140/167) 86.80% (145/167)
Tender 76.90% (20/26) 82.80% (24/29) 80.00% (24/30) 83.30% (25/30)
60.00%
65.00%
70.00%
75.00%
80.00%
85.00%
90.00%
95.00%
100.00%
Drillship Jackup Semisub Tender
15-Oct-09
15-Apr-10
15-Sep-10
15-Oct-10
Source: RigZone
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Current Competitive Offshore Rig Utilization by Region
Review of Jack-ups, Semis and Drill Ships MarketsCurrent Market Scenario
0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%
100.0%Region % Utilization
(Contracted/Total)
Africa - West 87.0% (47/54)
Asia - SouthEast 82.6% (71/86)
Europe - North Sea 88.7% (63/71)
Mediterranean 59.1% (13/22)
MidEast - Persian Gulf 77.1% (74/96)
N. Amercia - Mexico 63.6% (21/33)
N. Amercia - US GOM 62.5% (50/80)
S. America - Brazil 90.2% (55/61)
2007-2008 Utilization:91% globally
Source: RigZone
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Current Competitive Offshore Rig Utilization by Regions in Asia
Review of Jack-ups, Semis and Drill Ships MarketsCurrent Market Scenario
15-Oct-09Contracted/
Total)15-Apr-10
Contracted/Total)
15-Sep-10Contracted/
Total)15-Oct-10
Contracted/Total)
Asia - Far East 91.70% (22/24) 83.30% (20/24) 75.00% (21/28) 75.00% (21/28)
Asia - South 96.90% (31/32) 88.90% (32/36) 87.50% (28/32) 96.90% (31/32)
Asia - SouthEast 73.30% (55/75) 71.80% (61/85) 82.60% (71/86) 82.60% (71/86)
Australia 100.00% (14/14) 91.70% (11/12) 100.00% (12/12) 91.70% (11/12)
60.00%
65.00%
70.00%
75.00%
80.00%
85.00%
90.00%
95.00%
100.00%
Asia - Far East Asia - South Asia -SouthEast
Australia
15-Oct-09
15-Apr-10
15-Sep-10
15-Oct-10
2007-2008 Utlilization:100% in South Asia and Southeast Asia Source: RigZone
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Current Day Rates of Drillships and Semisubs
Review of Jack-ups, Semis and Drill Ships MarketsCurrent Market Scenario
Operators - Willing to wait for the availability to pressure dayrates further before fixing long term contracts, Contractors - Reluctant to succumb to dayrate reductions in order to secure backlog.
$0.00
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
$300,000.00
$350,000.00
$400,000.00
$450,000.00
$500,000.00
0
10
20
30
40
50
60
70
80
90
100
Drillship< 4000' WD
Drillship4000'+ WD
Semisub< 1500' WD
Semisub1500'+ WD
Semisub4000'+ WD
Rigs Working
Total Rig Fleet
Average Day Rate
Snapshot as of 15th Oct 2010
Source: RigZone
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Current Day Rates of Jack-ups and Tender Rig
Review of Jack-ups, Semis and Drill Ships MarketsCurrent Market Scenario
Jack-up day rates will continue to soften in the short term before recovering
$0.00
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
$120,000.00
$140,000.00
$160,000.00
0
20
40
60
80
100
120
140
160Jackup
IC < 250' WD
JackupIC 250' WD
JackupIC 300' WD
JackupIC 300'+ WD
JackupIS 250' WD
JackupIS 300' WD
JackupMC < 200' WD
JackupMC 200'+ WD
JackupMS 200'+ WD
Tender
Rigs Working
Total Rig Fleet
Average Day Rate
Snapshot as of 15th Oct 2010
Low utilization and new capacity addition reduced day rates in 2009/2010 from their peak in 2007-2008.
Source: RigZone
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Source: Industry sources; Compiled by Frost & Sullivan
Jack-up and Drillship Deployment in Asia Pacific (2010)
Jack-up Deployment in Asia Pacific, 2010Total: 90
Drillship Deployment in Asia Pacific, 2010Total: 10
Review of Jack-ups, Semis and Drill Ships Markets
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Source: Industry sources; Compiled by Frost & Sullivan
Semi-submersible Deployment in Asia Pacific; 2010Total: 22
Tender Rigs Deployment in Asia Pacific; 2010Total: 17
Semisubmersible and Tender Rigs Deployment in Asia Pacific (2010)
Review of Jack-ups, Semis and Drill Ships Markets
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Source: Industry sources; Compiled by Frost & Sullivan
Jack-up Owners with Deployment in Asia Pacific
Jack-up Owners with Deployment in Asia Pacific; 2010
Total: 90
Review of Jack-ups, Semis and Drill Ships Markets
13
Source: Industry sources; Compiled by Frost & Sullivan
Drill Ship Owners with Deployment in Asia Pacific
Drillship Owners with Deployment in Asia Pacific; 2010
Total: 10
Review of Jack-ups, Semis and Drill Ships Markets
14
Source: Industry sources; Compiled by Frost & Sullivan
Semi-submersible Owners with Deployment in Asia Pacific
Semi-submersible Owners with Deployment in Asia Pacific; 2010
Total: 22
Review of Jack-ups, Semis and Drill Ships Markets
15
Source: Industry sources; Compiled by Frost & Sullivan
Tender Rigs Owners with Deployment in Asia Pacific
Tender Rigs Owners with Deployment in Asia Pacific; 2010
Total: 17
Review of Jack-ups, Semis and Drill Ships Markets
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Jack-up Manufacturers
Jack-ups Manufacturers Market Share; APAC Deployment, 2010
Source: World Fleet Data
Others include: Mitsubishi, PPL Shipyard, Rauma Repola, Italcanteiri Shipyard, Nippon Kokan, Levingston Shipbuilding, Mazagon Dock, CFEM, Astilleros Corrientes, U.E.I Clydebank, China Shipbuilding, Alabama Drydock, Jurong Shipyard and Daewoo Shipbuilding
From Data available for 90 Jack-ups deployed in Asia Pacific
• LeTourneau is owned by Rowan Companies
• Ingalls is part of Northrop Grumman
• Far East Levingston is now Keppel FELs
Review of Jack-ups, Semis and Drill Ships Markets
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Drill Ships Manufacturers
Drill Ships Manufacturers Market Share; APAC Deployment, 2010
Source: World Fleet Data
From Data available for 10 Drillships deployed in Asia Pacific
Review of Jack-ups, Semis and Drill Ships Markets
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Semi-subs Manufacturers
Semi-Subs Manufacturers Market Share; APAC Deployment, 2010
Source: World Fleet Data
From Data available for 22 Semi-subs deployed in Asia Pacific
Review of Jack-ups, Semis and Drill Ships Markets
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Tender Rigs Manufacturers
Tender Rigs Manufacturers Market Share; APAC Deployment, 2010
Source: World Fleet Data
From Data available for 17 Tender Rigs deployed in Asia Pacific
Review of Jack-ups, Semis and Drill Ships Markets
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The worst is over for Rigs; but challenges exist
Review of Jack-ups, Semis and Drill Ships Markets
• The new local rigs coming into the APAC market are likely to secure charters. National oil companies in the region are likely to give preference to domestic service providers to localize the rig market, in replacement of existing foreign-owned rigs.
• Demand picking up in Southeast Asia
• Many E&P companies are modestly increasing their capital expenditure budgets for 2011
Conclusion
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Deliveries and Capital Expenditure
Jack-up, Semis, Drill Ships & Tender Rigs Deployment in Asia Pacific
Current Market Scenario
Table of Contents
ContentsContents
Review of FPSOs Markets
Review of Jack-ups, Semis and Drill Ships Markets1
2
Current Market Scenario
Owners & Manufacturers of Rigs
FPSO Operators in Asia Pacific
Strategic Review of the Asia Pacific Offshore Rigs Market
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Review of FPSOs Markets
FPSO Deployment in the Asia Pacific, 2010Total 61 FPSOs deployed in APAC waters
Leased Versus OwnedTotal: 61
FPSO Markets – Current Market; Asia Pacific
• The FPSO market has grown as the offshore oil industry has ventured into deeper and more remote locations. The market is in entering the maturity phase
• FPSO projects are mostly long-term and need large capital outlay. Stable market conditions are necessary for the FPSO projects to take-off. The FPSO was negatively impacted by the 2009 economic recession.
• The FPSO market is on the road to recovery. Good prospects indicated for 2011 and beyond
Australia, 16
China, 17
India, 1
Indonesia, 8
Malaysia, 3
New Zealand, 2
Philippines, 1
Thailand, 5
Vietnam, 8
Leased, 32
Owned, 29
Source: World Fleet Data
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Review of FPSOs MarketsFPSO Markets – Current Market; Asia Pacific
CNOOC, 10
MODEC, 8
ConocoPhillips, 5
Woodside, 4
Aker BO, 3Emas, 3Chevron, 2Coogee, 2
Prosafe, 2
PTSC, 2
Rubicon Offshore , 2
Vietsovpetro, 2
AGR, 1
Aibel, 1
Anadarko, 1
BHP, 1
BLT, 1
Bluewater, 1
Bumi Armada, 1
FVSB, 1
M3nergy, 1 Maersk, 1
Oceaneering, 1
Premier Oil, 1
Premuda, 1SBMO, 1 SembCorp Marine, 1
Tanker Pacific, 1
FPSO Operators in the Asia Pacific, 2010Total 61 FPSOs deployed in APAC waters
Source: World Fleet Data
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Review of FPSOs Markets
Asia is emerging as a major market
for FPSOs
More deepwater
plays globally
National oil companies in
the Asia Pacific region
Emergence of smaller
independent oil & gas companies
Viability of offshore
marginal fields
Fast track projects/Phased developments
Market Drivers
APAC Installations• FPSOs deployment favorable in Asia Pacific – benign and shallow waters• Most past deployments have been tanker conversions• The proportion of new builds is expected to increase in the forecast
FPSO Markets – Market Drivers
Source: Industry Sources, Frost & Sullivan
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Review of FPSOs Markets
Western Europe
15%Africa26%
North America6%Middle East
1%
Latin America30%
South Asia, SEA, North Asia
14%
ANZ8%
Global FPS Installation Capital Expenditure, 2010-2014Total: US$ 37 Billion
Lower Capital Outlay Required for APAC Installations
Most of the planned installations in Asia will be redeployments. These require minimal capital outlay for upgrades and modifications
Asia Pacific has benign and shallow waters, thus allowing simpler, cost effective FPS solutions to be implemented
FPSO Markets – FPS Installation Capital Expenditure
Source: Industry Sources, Frost & Sullivan
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Review of FPSOs Markets
Innovation is important – but tough sell with major oil & gas companies
•Smaller independent operators more open to selecting new innovative designs compared to large multi-national operators
•The primary aim of innovation is to reduce costs of the vessels, other development components and project operations
•New design concepts are proposed by engineering companies, contractors and fabricators
•An innovative new FPS design can reduce the capital and operating costs
•An unproven concept must have cost advantage over other rival field proven solutions if it is to compete
•A minimum savings of 10-20% on capital expenditure and or operation expenditure relative to proven solutions are required to justify for an operator to choose a new FPS design
FPSO Markets - Innovation
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0
2
4
6
8
10
12
14
16
18
20
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Review of FPSOs Markets
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Number of FPSO Installations
10 11 12 11 12 16 19 9 9 10
FPSO Markets – FPSO Installations Forecast
Source: Mustang Engineering, Frost & Sullivan
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Review of FPSOs Markets
INDONESIA- Deep Water•Gehem•Gendalo
Prospective FPSO Projects in Asia Pacific
THAILAND•PTTEP Block B6/27 Nang Nuan FPSO
VIETNAM•Lam Son JOC FPSO•Chevron Block 48/95 & 52/97 FSO•Bien Dong Hai Thach & Moc Tinh FSO
AUSTRALIA•INPEX Ichthys FPSO•Woodside Browse LNG Development
MALAYSIA•Petronas FLNG FEED•Shell Mallikai TLWP•Petronas/MISC FSRU
INDONESIA•INPEX Masela FLNG•Petramina FSRU
INDIA•KG-DWN-98/2 ONGC
INDONESIA- Shallow Water•Terang/Sirasun FPSO (TSB), •Pagerungan, •Madura, •Kakap Natuna•Bukit Tua
Source; MODEC, Industry
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For Additional Information
Donna JeremiahCorporate CommunicationsAsia Pacific+603 6204 [email protected]
Carrie LowCorporate CommunicationsAsia Pacific+603 6204 [email protected]
Subramanya BettadapuraAssociate DirectorEnergy & Power Systems+603 6207 [email protected]
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