Vessel Contractors Reshape for the Rebound
McDermott reported the acquisition of the Ceona Amazon last month, built by the Lloyd Werft yard in Bremerhaven, Germany, for USD 52 million and changed its name to Amazon. Ceona, which paid USD 350 million for the newbuild vessel, went into insolvency in September 2015. The vessel went into layup immediately upon delivery from the shipbuilder in 2015.
The Amazon is a deepwater pipelay and construction vessel, equipped with 49,514 ft2 of deck space with two 440-ton cranes, a service speed of 12 knots, and accommodation for up to 200 crew and service staff. McDermott plans to upgrade the vessel with a state-of-the-art J-lay system to increase its subsea umbilicals, risers, and flowlines capabilities in ultradeepwater projects. The vessel is en route to the Middle East and is scheduled to arrive this month and expected to be ready to work on current projects in April.
McDermott said the acquisition aligns with its strategy to expand its ultradeepwater work. Almost 60% of all conventional oil and gas discoveries from 2005–2014 were in ultradeepwater, and 60% of all offshore growth is expected to be in ultradeepwater, according to the company.
The announcement of EMAS Chiyoda’s bankruptcy is the latest in a long line of vessel contractors to fall victim to the downturn since January 2015. Multiple companies such as Cal Dive, Ceona, Cecon, Hercules Offshore, Harkand, and Swiber have entered into administration, taking a significant number of vessels out of the active fleet. In other cases, internal restructuring measures (e.g., Siem Offshore, Boa Offshore, and Deepocean) were/have been in order. While current indicators of subsea activity such as subsea tree orders remain weak, industry sentiment is improving, with oil prices approximately 76% higher this February relative to the average WTI recorded last February.
With a market equilibrium and a recovery in sight, 2017 represents an opportune time for substantial industry consolidation and opportunistic vessel acquisitions to support long-term business strategy objectives. For example, McDermott’s recent acquisition of the newbuild Ceona Amazon at a significant 77% discount to the reported build cost, will serve to strengthen and rejuvenate its subsea fleet, putting the company one step closer to their ultradeepwater expansion strategy.
The recent downturn has been one of the most trying times in the history of the subsea industry. However, the removal of noncompetitive low-spec vessels and strategic moves by vessel contractors to acquire high-spec vessels at discount rates, will find them well-positioned to capitalize as the market continues to stabilize.
Phillips 66 Forms JVs To Boost Takeaway Capacity from Bakken and Permian
Phillips 66 and partners in two separate joint ventures are building the Red Oak and the Liberty pipeline systems to deliver a total of approximately 750,000 BOPD to the US Gulf Coast with startup of service in early 2021.
Cactus II Pipeline To Start Partial Service in the Permian by Year End
Approximately 90% of construction work has been completed on the pipeline, which is expected to transport up to 670,000 BOPD from the Permian Basin to the US Gulf Coast. Cactus II is one of several pipelines aimed at alleviating takeaway concerns in the Permian.
Can Robots Improve Above-Water Riser Inspections?
The criticality of above-water riser hull piping requires frequent inspections. Traditional manual inspection methods present safety and efficiency concerns, but work is being done to see if robotic technologies—such as drones and crawlers—can do the job as good as, or even better, than humans.
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04 June 2019
05 June 2019