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It has just delivered first jack-up rig of a two-rig contract to the Qatar company
(SINGAPORE) Delivering its first jack-up drilling rig of a two-rig contract to Qatar's national drilling company Gulf Drilling International (GDI) on Friday, Keppel Offshore & Marine is eyeing repeat business with its newest customer as its yards worldwide remain busy with 29 jack-ups in various stages of construction.
The proprietary KFELS B Class jack-up rig, designed to operate in 300 feet of water, was named Al-Khor at Friday's ceremony at Keppel FELS shipyard.
Built for the 60-40 joint venture between Qatar Petroleum and Japan Drilling Company, the rig, delivered ahead of schedule, will be followed by a sister-rig due for delivery by the end of next year. Previously Keppel had undertaken a refurbishment job for one of GDI's rigs. But if the comments by GDI's chairman are any indication, Keppel could find its hands full of orders from the expansionist-minded GDI. 'Gulf Drilling International was not created only for Qatar's needs but for the Gulf region, Middle East and the world as a whole,' said GDI chairman Mohammad Al-Shirrawi.
'We are growing fast, but it is planned growth well invested, properly conceived and with a very strong partner, Japan Drilling, with whom we have an excellent relationship.' While focusing only on Qatar's needs for the moment, Mr Al-Shirrawi said the group plans to grow its rig fleet to 20 jack-ups within the next 10-15 years in order to expand regionally and globally, and as such, is in discussions with Keppel on some form of long-term tie-up.
Speaking to the press on Friday, Keppel O&M chairman and chief executive Choo Chiau Beng said: 'We love long-term relationships and that is always our target.
'To win a customer and have him come back again and again has always been our goal,' he said, citing the example of the AP Moller group which has been a repeat shiprepair customer for over 30 years. In the offshore sector, Ensco International and Diamond Offshore have been among the main repeat customers.
'When these customers return we know what they want and they know what we can do, so both sides have reasonable expectations and our target is to meet and exceed those expectations so that they'll come back again. We hope we will be able to deliver continuously for Qatar Petroleum,' he said.
Currently, Keppel is building 29 jack-ups of which 22 are in Singapore and seven in the US at the Keppel AmFELS shipyard in Brownsville, Texas. With two years to build a jack-up and a one-year wait due to the order back-log, companies are now looking at three years from signing of contract to delivery.
'In this market we have ramped up production and we see we can increase production a little bit, but it's not the yard space that is the important thing, it's key equipment, it's the whole supply chain,' Mr Choo said.
'Fortunately for us we have built many of this rig design. This is our 10th jack-up of this design, so we have virtually all the bugs ironed out and we have a good supply chain. We know who can supply what, at what time.'
On current oil prices, Mr Choo said that most oil companies still use a US$30 per barrel price to determine viability of projects.
'But these super-high oil prices are the froth, they create a lot of speculative activity which is not very good for a long-term player like us. As a longer-term player we like oil prices to be stable, maybe around Opec's target of US$40-US$50 per barrel is a good price.
'We don't like huge oil price jumps to US$70-US$80; we don't get any benefit, only the speculators benefit. We like stable, long-term healthy prices that make projects viable and to be frank, the world is better for it,' he said.
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