|
Investment in Stocks - Forum for sharing info about stocks and options.
|
|
|
|
|
Posted by Don Tiberone on June 22, 2008, 10:55 am
http://www.nytimes.com/2008/06/19/business/19drillship.html?bl=3D&ei=3D5087=
&en=3De07e60d4bf395ce6&ex=3D1214280000&pagewanted=3Dall
Dearth of Ships Delays Drilling of Offshore Oil
By JAD MOUAWAD and MARTIN FACKLER
Published: June 19, 2008
As President Bush calls for repealing a ban on drilling off most of
the coast of the United States, a shortage of ships used for deep-
water offshore drilling promises to impede any rapid turnaround in oil
exploration and supply.
In recent years, this global shortage of drill-ships has created a
critical bottleneck, frustrating energy company executives and
constraining their ability to exploit known reserves or find new ones.
Slow growth in oil supplies, at a time of soaring demand, has been a
major factor in the spike of oil and gasoline prices.
Mr. Bush called on Congress Wednesday to end a longstanding federal
ban on offshore drilling and open the Arctic National Wildlife Refuge
for oil exploration, arguing that the steps were needed to lower
gasoline prices and bolster national security. But even as oil trades
at more than $135 a barrel =97 up from $68 a year ago =97 the world=92s
existing drill-ships are booked solid for the next five years. Some
oil companies have been forced to postpone exploration while waiting
for a drilling rig, executives and analysts said.
Demand is so high that shipbuilders, the biggest of whom are in Asia,
have raised prices since last year by as much as $100 million a vessel
to about half a billion dollars.
=93The crunch on rigs is everywhere,=94 said Alberto Guimaraes, a senior
executive at Petrobras, the Brazilian oil company that has discovered
some of the most promising offshore oil but has been unable to get at
it.
=93Almost 100 percent of the oil companies are constrained in their
investment program because there is no rig available,=94 he said.
As a result, drilling costs for some of the newest deepwater rigs in
the Gulf of Mexico =97 the nation=92s top source of domestic oil and
natural gas supplies =97 have reached about $600,000 a day, compared
with $150,000 a day in 2002.
These record prices have spurred a new wave of drill-ship
construction. This boom could lead to renewed offshore oil exploration
that would eventually bring more supplies to the oil market, and push
down prices.
Already, 16 new drill-ships are scheduled to be delivered to oil
companies this year =97 more than double the number delivered over the
last six years combined. In fact, 75 ultra-deepwater rigs should be
delivered from 2008 to 2011, according to ODS-Petrodata, a firm that
tracks drilling rigs.
Shipyards from South Korea to Norway are working overtime to meet a
huge influx of orders.
Robert L. Long, the chief executive office of Transocean, the world=92s
largest drilling company, said he has nine deepwater rigs under
construction, eight of which are already under contract for periods
ranging from four to seven years once they leave the shipyards. He
expects to receive the ships between the beginning of 2009 and the end
of 2010.
Transocean believes the deepwater market will continue to be
constrained until at least 2012. Over three-quarters of the drill-
ships currently under construction have already been contracted to oil
companies eager to benefit from triple-digit oil prices, Mr. Long
said.
Petrobras, whose full name is Petr=F3leo Brasileiro, is expected to
drive much of the growth in the booming new market. The company has
outlined an aggressive program to increase its drilling capacity, and
plans to contract or build 69 deepwater drill-ships by 2017.
Brazil stunned the oil world when it announced the discovery of a vast
oil field 200 miles south of Rio de Janeiro last November, turning the
country=92s deep blue waters into the world=92s most exciting oil
frontier. Energy experts said the field could turn out to be just a
small part of the largest oil discovery in 30 years.
But seven months later, the problem is still how to retrieve it.
Petrobras has only three rigs capable of drilling in waters that
exceed 6,500 feet, like the sites of the new fields.
But drilling constraints are not the only problem facing international
oil companies, which are seeking to expand at a furious pace after a
decade of underinvestment in the 1990s. They have also had to contend
with a doubling of development costs across the industry in the last
five years, more acute competition for energy resources, shortages in
steel, engineering and manufacturing capacity, and pressures posed by
an aging work force.
Also, gaining access to countries that hold oil reserves is becoming
tougher as many oil-rich governments see fewer incentives to raise
production as they reap the benefits of higher prices.
As a result, explorers are scouring ever-more remote corners of the
globe in their hunt for hydrocarbons. That quest has found petroleum
reserves off the shores of Africa and Brazil, and opened up promising
exploration regions in the South China Sea, off the shore of India,
and around the coast of Australia. But those sites will remain largely
off limits until the new drill-ships arrive.
Most new orders for drill-ships have gone to Asian shipyards.
Companies in Singapore and China have benefited, but South Korea=92s big
three shipbuilders =97 Samsung Heavy Industries, Daewoo Shipbuilding and
Marine Engineering and Hyundai Heavy Industries =97 have gotten the bulk
of orders for the most complex and expensive types of vessels.
=93The market for offshore exploration is now the hottest sector in the
global shipbuilding industry,=94 said Lee Jae-kyu, shipbuilding analyst
at Mirae Asset Securities in Seoul.
At Samsung=92s sprawling shipyard on the southern Korean island of
Geoje, next to the gigantic hulls of half-finished supertankers,
cranes and dry docks work overtime to construct odd-looking drill-
ships like the West Polaris.
At 62,400 tons, the West Polaris, due for delivery this month, is
larger than a World War II aircraft carrier. The pipes and steel
scaffolding of its drill loom over the other ships lining the
construction yard, like cars in an oversize parking lot.
The shipyard and its 25,000 workers bustle with activity, emitting a
cacophony of clanging construction sounds, the roar of motors and
short musical ditties that warn of moving cranes. These sounds echo in
the emerald hills behind the yard, which stretches across one side of
a deep blue bay.
=93The oil reserves that were easy to reach are all drying up,=94 said
Harris S. Lee, vice president in charge of Samsung=92s offshore drilling
rig business. =93The future is in exploring the deep seas and harsh
environments.=94
A big challenge in deep-sea drilling is to stay over the same spot on
the sea floor even as the vessel is buffeted by strong winds, currents
and waves. Because water depths can reach up to 10,000 feet, far too
deep for traditional rigs that are moored to the seafloor, ships like
the West Polaris rely on high-speed computers that use global-
positioning satellites to control an array of six swiveling propellers
on the hull=92s bottom.
The ship was ordered by Seadrill, a Bermuda-based offshore exploration
company, for $453 million.
Last month, Samsung announced it had received a $942 million contract
to build an even hardier type of drill-ship made specifically for
Arctic conditions. The vessel, ordered by Stena Offshore, a Swedish
company, will have a hull strong enough to break through ice,
withstand 50-foot waves and insulate the men and machinery inside from
outside temperatures as low as 40 degrees below zero. Samsung=92s sales
of all types of offshore drilling vessels jumped to $7.8 billion last
year, up from $1.5 billion in 2005.
Despite the construction frenzy, constraints in the rig market could
last several more years.
The last such boom in orders came in the late 1970s and early 1980s,
when exploration rose after the 1970s oil shocks. In the 1990s, low
oil prices and overflowing oil supplies led oil companies to cut back
on exploration drastically.
=93It will certainly mean more drilling activity and more discoveries in
the deepwater side,=94 said Tom Kellock, the head of consulting and
research at ODS-Petrodata.
|
| Similar Threads | Posted | | Re: DEMOCRATS BLOCK OFFSHORE DRILLING BILL | July 15, 2008, 11:26 am |
| US grain exports snagged by infrastructure delays | August 24, 2008, 8:56 pm |
| New large private equity funds facing delays | June 5, 2008, 8:48 pm |
| Re: DEM CONGRESS PLAYING "OIL DRILLING TRICKS" ON AMERICA | July 17, 2008, 5:48 pm |
| Re: DEM CONGRESS PLAYING "OIL DRILLING TRICKS" ON AMERICA | July 17, 2008, 6:11 pm |
| BUSH PLAYING "OIL DRILLING TRICKS" ON AMERICA | July 18, 2008, 8:38 am |
| Re: BUSH PLAYING "OIL DRILLING TRICKS" ON AMERICA | July 18, 2008, 11:38 am |
| offshore online trading | April 1, 2008, 7:15 pm |
| Billionaire Cashes In On Offshore Oil Rush | April 4, 2008, 7:35 pm |
| Offshore company formation and banking | April 5, 2008, 6:59 am |
|
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap