Drydocks World in $730m rig deal
Dubai, January 14, 2014
Drydocks World, the Dubai-based group which has undergone a multi-billion-dollar debt restructuring, said it had been commissioned to construct “Dubai Expo 2020 NS,” the largest rig ever built for the North Sea in a deal worth $730 million.
The order from a company called Drill One Capital - whose backers include GustoMSC, spun off in 2012 by SBM Offshore , and Petrolia - was part of a package of contracts which could be worth a total of $1.4 billion to Drydocks by the third quarter, its chairman, Khamis Juma Buamim, told a press conference.
The rig - a "jack-up" or self-elevating structure known as CJ-80 - will be the largest ever to be built for the North Sea, with completion set for 2017, Buamim said.
Designed to be operated in harsh environments including the Norwegian Sector of the North Sea at a maximum water-depth of 175 meter with 25 meter air-gap, the rig is another ground-breaking project among the growing portfolio of new build projects for the offshore oil & gas being implemented by Drydocks World.
The 101 x 110m, 5500 sq m unit will be classed by DNV and meet all rules and regulations in force in the Norwegian and the UK sector of the North Sea, said the Dubai ship builder in its statement.
The rig is totally eco-friendly – up to 30 per cent less fuel consumption due to use of latest fuel efficient technology; tier 3 compliant; generates fresh water using waste heat from engine cooling; heat by hot water generated from exhaust waste heat; LED lighting where possible; reduced emission of CO2 and Nox - Up to 25 per cent reduction in emission compared to similar rigs; prepared for shore power; zero discharge to sea to meet Norwegian and UK legal requirements
The design draft will be 8.5m and its minimum operational water depth at 20m, while the length of its legs is set to be 232m. It has been designed to accommodate 160 persons preparing the unit to be used as a drilling and production unit.
The rig will be equipped with the latest drilling equipment making it capable of drilling up to 40,000 feet deep. The rig will be equipped with a total of four high pressure (7000 psi) mud pumps, it stated.
Commenting on the new rig, Buamim said: "From inception the UAE government strategy and Dubai in particular are focused on putting our industry at the forefront and whatever we do to be in the lead and globally No.1. Today we have entered into the next stage of technology and design by building a green Rig which take the oil industry to a new level."
Drydocks had agreed to a restructuring plan worth $2.2 billion in 2012 having got into difficulty after taking on debt to fund its expansion into southeast Asia.
The firm would continue to meet all repayments this year according to a plan agreed with creditors, Buamim said, although he ruled out the kind of early repayment which Nakheel, another Dubai state-linked entity which required a restructuring, has promised on its liabilities.
"We have a five-year plan and according to this plan and these dates, we are complying with that fully," Buamim said. "Our business, Nakheel's business and other businesses are all different and we work based on our business portfolio," he added.
Drydocks World's earnings before interest, taxes, depreciation, and amortisation (ebitda) reached around $110 million in 2013, around the same as in 2012. For 2014 and 2015, the level would be better, he said without offering specifics.
Drydocks sees opportunities in the oil and gas and renewables sectors in Europe, with wind power in Germany an area of particular interest.
It was also looking to maximise opportunities closer to home, with Dubai providing between $20 million and $30 million of revenue a month, and from across the Gulf, if economic sanctions on Iran are lifted under a rapprochement with the West.
"Our business with Iran never closed totally but we are looking forward to seeing positive things turn out of the political situation. It has a lot of potential and we hope to be their first choice," Buamim said.
However, he was less keen on Turkey, in part because of recent political turmoil.
"At one stage, there were discussions with some partners in Turkey but, unfortunately, the situation doesn't warrant that," Buamim said, noting: "It's the economic side, the potential risk and because our partners who we were talking to didn't satisfy us enough," he added.-Reuters and TradeArabia News Service