Jackups on the rise

May 1, 2014

Three newbuild jackups based on the XL Enhanced design will hit the market in 2014, 2015, and 2016. Photo from Maersk Drilling.

A number of rig providers are increasing their fleet with builds over the next three years. Audrey Leon provides a roundup of the latest designs hitting the market. 

Many rig operators are making efforts to not only renew but increase their drilling rig options. Jackups are the hottest commodity with a slew of newbuilds heading up the global market in the next few years. Transocean chalks it up to demand.

“We anticipate demand for these rigs as the renewal of the industry’s jackup fleet continues,” the company said in its 2013 Annual Report. “This sector has been developed to a significantly greater degree than the deepwater market sector because the shallower water depths have made it much more affordable and accessible than the deeper water market sectors.”

InfieldRigs shows that as of 14 April 2014, there are 413 jackups around the globe, 361 with contracts for a total utilization rate of 87%.

Transocean is not alone in opting to build more jackups. Seadrill, Ensco Plc, Noble Drilling and Maersk Drilling will also bring multiple new jackups into their fleet over the next three years.

“The jackup market has traditionally been a shorter term market; however we expect longer term contracts to be executed going forward,” said Fredrik Halvorsen, Chief Executive Officer of Seadrill Management Ltd, in 2013. “In addition to increased terms, we expect to see rising dayrates as attrition accelerates amongst an aging global fleet.”

Maersk Drilling’s recent 2013 Annual Report says that the market for ultra- harsh environment jackups remains strong with full utilization of its capacity throughout 2013. “Most jackups are tied up in long term contracts reducing the near term availability of jackup rigs in the market where the first rig is available in the 4Q 2014,” according to the Maersk report.

InfieldRigs data, as of 1 April 2014, lists high-spec jackups as having an average dayrate of $231,400. By comparison, drillships bring in an average of $365,100/d. Semisubmersible rigs on average bring in $394,100/d.

Maersk Drilling

Maersk Drilling has an extensive program of newbuilds to come over the next two years that includes four new jackups and four new drillships. The company has ordered four ultra-harsh environment GustoMSC CJ70 designed jackups, built for a maximum water depth of 492ft, and a maximum drill depth of 40,000ft. Three XL Enhanced jackups are currently under construction at the Keppel FELS shipyard in Singapore. A fourth jackup is under construction at the Daewoo Shipbuilding and Marine Engineering’s (DSME) Okpo Shipyard in South Korea. Delivery is expected to occur from 2014-2016.

The XL Enhanced jackups are designed for year-round operation in the North Sea, with the capacity to operate in water depths of 492ft, and a maximum drill depth of 40,000ft. The design also features dual pipe-handling, which allows for offline stand building of drill pipe, casing or bottom hole assembly while one string is working at well center, and a remotely- operated pipe handling system, which allows all standard operations such as stand building and tripping to be con- ducted without personnel on the drill floor.

The first XL Enhanced jackup, due for delivery in 2014, will serve Total E&P Norge’s Martin Linge field (formerly Hild), in a four-year contract valued at $550 million. The XL Enhanced 2, due for delivery 4Q 2014, will be used for drilling on Det norske Oljeselskap ASA’s Ivar Aasen (formerly Draupne), in the Norwegian North Sea. The contract is for five years and is worth $700 million. Maersk’s XL Enhanced 3, due for delivery in 2Q 2015, will serve Statoil’s Gina Krog (formerly Dagny) development off Norway in a four-year, $630 million con- tract. The XL Enhanced 4 jackup, to be delivered from DSME in mid-2016, has been signed by BP Norway for five-years in a contract valued at $812 million. Options to extend up to a total duration of 10 years. The XL Enhanced 4’s work will include plug and abandonment assignments on the Valhall field in the Norwegian North Sea.

The Maersk Inspirer, the jackup on which the XL Enhanced design is based. Photo from Maersk Drilling.

Ensco

Ensco plc currently plans to add five jackups to its fleet. Ensco announced in April that it ordered two jackups, the Ensco 140 and 141–based on the LeTourneau Super 116E design–to be built at the Lamprell shipyard in UAE, due mid-2016. Three more jackups are under construction at the Keppel FELS yard in Singapore. The Ensco 122 and the Ensco 123 are in the Ensco 120 series–based on the Keppel FELS Ultra- Enhanced Super “A” Class design. The 120 series includes a patented high- capacity cantilever envelope and a 2.5 million-pound quad derrick for drill- ing in harsh environments up to 400ft water depth, capable of drilling down to 40,000ft. The series features automated hands-free offline pipe handling systems, ultra-high capacity jacking and fixation systems, and 145-person quarters.

The Ensco 122 and Ensco 123 are scheduled for delivery in 4Q 2014, and 2Q 2016, respectively. A third jackup, the Ensco 110 is a Keppel FELS B Class Bigfoot design capable of operating at 400ft water depth, and drilling down to 30,000ft. The Ensco 110 will have a nominal variable deck load of 7500kips and a cantilever load of 2500kips. It also has a 1.5 million-pound derrick, TDS-8 top drive and 15k BOP. Ensco says it customized the rig to add dual drilling fluid capability and to upgrade the living quarters to 6 one-person and 67 two-person rooms. Delivery is due 1Q 2015.

Noble Drilling

Noble Drilling has six rigs, four jackups and two drillships, under construction and due for delivery between 2014 and 2016.

Two jackups, the Noble Tom Prosser, and the Noble Cam Hartley, are under construction at Jurong Shipyard in Singapore, and due for completion in 2014. The Noble Sam Turner was deliv- ered this year and is preparing to work offshore Denmark. All three are Friede & Goldman JU3000N-designed jackups. All are ABS +A1 classed, self-elevating drill- ing units. The three jackups are built for water depths of 400ft, can drill to depths of 35,000ft, have a variable deck load of 14,300kips, and quarters for 150 people. The Noble Tom Prosser and Noble Sam Hartley are both in-transit and undergo- ing acceptance testing, with delivery expected 4Q 2014.

Another jackup under construction at the Jurong yard is the Category J Noble CJ-70–based on the GustoMSC CJ70. The unit is due 1Q 2016 and will undergo acceptance testing in the UK, according to Noble’s latest fleet status report. It can operate in up to 492ft water depth, and drill to 32,000ft. It has a variable deck load of 17,600kips, with quarters for 150. Noble’s CJ-70 will work Statoil’s Mariner field in the UK North Sea, approximately 150mi. east of the Shetland Islands.

Transocean

Transocean announced 14 additional newbuild projects for the next three years, including nine high-specification ultra-deepwater drillships and five pre- mium jackups scheduled to join the fleet between 2014 and 2018. In 2013 three newbuild jackups–Transocean Andaman, Transocean Ao Thai and Transocean Siam Driller–were placed into service with Chevron in Thailand.

Transocean signed shipyard contracts valued at approximately $1.2 billion to construct five Super B 400 Bigfoot Class jackup rigs with options for five addi- tional jackups. The first five, unnamed, are scheduled for completion in 1Q 2016 and continuing into 3Q 2017. All of the jackups have an operational capacity if 400ft water depth and can drill down to 35,000ft.

Seadrill

Seadrill’s newbuild campaign includes nine jackups, eight drillships, and three semisubmersibles. Seadrill is currently building nine harsh environment jackups at the Dalian yard in China. All will have the Friede & Goldman JU2000E design, which features a modular hull design, enhanced leg design, extended reach cantilever (75ft aft of transom with maximum combined drilling load of 2600kips on centerline at 75ft extension) and 15k BOP. The JU2000E is also capable of operating in up to 400ft of water and drilling down to 30,000ft, and has capacity for 140 people. Delivery will take place between 1Q 2014 and 3Q 2016.