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Record Number of Floating Production System Awards Expected Over the Next 18 Months

IMA/WER November 1, 2021

Credit: Ranimiro/AdobeStock

Around 30 production floater contracts are now queued up for award over the next 18 months, assuming no major market disruption occurs and the supply chain can absorb the orders within this time frame. That&rsquo s the conclusion of an in-depth market analysis just completed by IMA/WER.

The market surge is being driven by crude prices that have climbed to the mid-$80s on fast rebounding oil demand growth, supply constraints by OPEC+ and inadequate investment by upstream players to replace production.

According to Jim McCaul, Managing Director of IMA/WER, &ldquo the deepwater production market has turned red hot. The queue of near-term project starts has grown each month since Q1. We now see 25 FSPO and 5 FPU contracts lined up for award by early 2023.&rdquo

McCaul said:&ldquo The principal constraint on near-term production floater orders is not market demand &ndash it&rsquo s the ability of the supply chain to absorb 30 new contracts over the next 18 months without costs and delays exploding.&rdquo

IMA/WER&rsquo s floating production report has up-to-date details and contracting status for more than 200 floater projects in the planning stage. Around 55% of these envisage use of an FPSO. Another 10% will require a production semi.

The rest are LNG and floating storage projects. The report also has details for 45 production or storage floaters on order, more than 300 floating production units in service and 40 production floaters available for redeployment contracts.

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01-Nov-2021 11:50

Seatrium / SembCorp Marine- The new Frontier.

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Hahaha ha...the quartet still missing ckmpd1 to make the perfect harmony.

ksangks ( Date: 01-Nov-2021 11:46) Posted:

Keppel want to make SCM a fool ?

share456 ( Date: 01-Nov-2021 11:40) Posted:

There is a high chance that SCM merged entity will be hit with lawsuite of $1 billion ?

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29-Oct-2021 21:04

Seatrium / SembCorp Marine- The new Frontier.

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Hey Changtai, you might be called up for work assignment soon.

Offshore drilling rig reactivations have begun

Oct. 29, 2021

Utilization and dayrates continue their rapid recovery.

Source: Esgian Rig Service

Change in number of drilling, warm-stacked and cold-stacked drillships between Jan 2020 and October 2021.

Teresa Wilkie * Esgian

We expected it to happen just not necessarily this soon. But now it&rsquo s official: several cold-stacked rigs are about to be reactivated for new jobs in the Golden Triangle, and Valaris is taking the lead. Just last week, the driller confirmed that it will reactivate sixth-generation, ultra-deepwater drillship Valaris DS-4 for a minimum 580-day deal with Petrobras Brazil. The rig has been idle for over two years.

This follows other recent announcements from the same rig owner for the seventh-generation drillship Valaris DS-11, which will also be revived for a long-term deal off Brazil with Petrobras and Valaris DS-16, which will undertake a two-year deal with Oxy in the US Gulf of Mexico starting next year.

Last year, the driller took a tough stance on its uncontracted fleet, preservation-stacking a hefty 19 rigs (nine floaters and 10 jackups) due to the lack of opportunities in the market. Now it appears to be front of the queue to bring those rigs back out and take advantage of the recovering market.

Meanwhile, Seadrill will reactivate its seventh-generation drillship West Jupiter, also for a multi-year deal with Petrobras Brazil, starting in late 2022. Additionally, stacked drillships Auriga and West Carina (both of which haven&rsquo t worked in over a year) will also be ramped up and put out to work in 2022 for long-term deals in the USA and Brazil, respectively.

So far, most reactivations have been confirmed for modern, ultra-deepwater drillships due to a rapid increase in competitive utilization. This, combined with a strong demand outlook for 2022 and 2023, is expected to result in longer-term campaigns and higher dayrates for these types of rigs.

Additionally, supply in this segment has also plummeted since the last upcycle. According to Esgian Rig Service, 44 drillships have been removed from the fleet since 2015. This is on top of the increased cold stacking that took place last year by the bigger rig players.

The drillship market is currently comprised of 58 units currently working, and 11 of the 16 hot/warm stacked assets now have future work in place.

With the pool of ready-to-go drillships shrinking, could this mean more of the remaining 18 cold-stacked units will return to operation? We expect to see reactivations initially for rigs that have been idle for the least amount of time, that have been well maintained, and that are still &ldquo top tier&rdquo younger assets.

Semisubmersible and jackup utilization have not yet reached levels comparable to drillships. As a consequence, there has been a limited number of confirmed reactivations for rigs of these types. But that doesn&rsquo t mean it may not happen further down the line if the market continues its recovery.

Youth versus experience

Stranded newbuilds are being considered again too, though there is still a preference for reactivating rigs with proven track records, rather than bringing out a newbuild that has never worked before. Supporting this idea are all the additional costs and potential issues that often come along with a newbuild shakedown.

Nevertheless, Saipem has confirmed a bareboat charter of the stranded seventh-generation drillship Samsung Santorini, which will be brought out of the yard in South Korea and put to work for Eni in the US Gulf of Mexico next year. Rumors suggest a few other newbuilds are currently under discussion too.

And there are plenty to choose from, with 18 under construction or categorized as stranded assets still in yards, and just three confirmed for delivery so far.

Reactivation economics

Valaris says that it will cost in the range of $30 to $45 million to reactivate each of its preservation-stacked floaters, and that in most cases it expects the initial contract to pay for these costs. Transocean, meanwhile, estimates that the total cash cost of reactivating a cold-stacked asset in its fleet starts at $60 million and could go upwards of $100 million.

Because most drillers will not reactivate unless they can be sure to recuperate costs, it may be that reactivation economics could become an important factor in setting drillship dayrate benchmarks in the coming months, especially if more cold rigs are brought into circulation.

Recent contracts fixed in the Golden Triangle have been as high as $300,000/day for active rigs, although the majority have been around the mid- $200,000/day mark. Ideally, a reactivation will be based on receiving a contract at a higher dayrate (somewhere around the $300,000 mark) and a duration of two years or more, but it is still possible to pay back the investment with one or the other assuming rig operating costs of around $120,000/day.

However, this may not be the case if reactivation costs are closer to Transocean&rsquo s estimates rather than those offered by Valaris. In such a case, the rig contractor would likely require the $300,000 dayrate plus a multi-year duration to make the reactivation investment worthwhile.

The difference in reactivation costs can vary depending on how the rig has been maintained during its stacked period, but also very importantly how long it has been idle for. The longer that a rig has been stacked, the higher the cost of reactivation and hence for these rigs, the higher that dayrates must go before the rig contractor deems it worthwhile to put the rig back into the market.

Competitive drillship utilization has recovered by 17 percentage points since this time last year and is now sitting at over 76%. Esgian Rig Service forecasts that this figure will rise above 80% before year-end, making its way to the sweet spot of 85% by 1H 2022, should all projects move ahead as planned.

Esgian reported previously that idle rigs can pose a threat to recovery if too many are brought back to the market at once, resulting in an oversupply which puts pressure on utilization and dayrates. Drillers must beware that this optimistic outlook could change quite quickly, and therefore caution must be taken.

However, so far there have been no reactivations based on speculation, and drillers appear to be sticking to their word about discipline. Rig restorations have only been confirmed for firm, long-term deals. Due to the new rebound in deepwater demand, the drillship market looks like it can handle the added capacity &ndash for now, at least.

The author: Teresa Wilkie has 10 years of experience as a reporter and analyst in the oil and gas business. Prior to her current position with Esgian, she served as an analyst with IHS Markit, RigZone and Westwood Global Energy.

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29-Oct-2021 20:49

Seatrium / SembCorp Marine- The new Frontier.

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Seems like the workers shortage situation could be resolved by early next year.

Firms applaud relaxed border measures for India and Bangladesh, but call for more clarity

BTO flats under construction in Toa Payoh. (Photo: Calvin Oh)

Grace Yeoh

27 Oct 2021 06:20AM(Updated: 27 Oct 2021 06:12AM)

SINGAPORE: While companies applauded Singapore' s move to reopen borders to India, Bangladesh and other South Asian countries from Wednesday (Oct 27), some are seeking clarity on the measures.

A pilot programme was launched in July by some companies in the construction, marine and process sectors to bring in migrant workers from India in a " calibrated manner" .

More details on the new border measures have yet to be given by authorities, but it is " positive news" nonetheless, noted Ms Louise Chua, executive director at Singapore Contractors Association.

" Of course I feel good having this piece of news, but the only thing is suddenly everybody wants (the workers from South Asia to come in). So most probably it will be a bottleneck as well" he told CNA.

Everyone wanting to come at once is also not possible. I think the beginning will be a mad rush.

" We' re a little bit happier that they' re relaxing (the rules), but they' re not clear on what is the relaxation. So probably we want a little bit more clarity," said Mr Ooi, who runs landscape and construction company Limelite Productions.

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29-Oct-2021 16:59

Seatrium / SembCorp Marine- The new Frontier.

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Amazing. Just bought 300k shares on wednesday. Today already receive a offer letter from Startree saying they want to buy the 300k shares from me.

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29-Oct-2021 15:20

Seatrium / SembCorp Marine- The new Frontier.

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Snatched the pork belly right from Keppel's mouth... All cash offer definitely better.

ahbui8 ( Date: 29-Oct-2021 14:54) Posted:

Why another TH link company go counter offer on SPH? I feel very funny, as it' s involved Keppel and TH, may indirectly something link to the merge negotiation.

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29-Oct-2021 14:50

Seatrium / SembCorp Marine- The new Frontier.

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I predict that price would stay the same for the next 2 weeks and I would be able to buy another bunch at 8 cents.

Chagatai ( Date: 29-Oct-2021 12:33) Posted:

I predict next week the price will either Go Up, remain Same or Go Down

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29-Oct-2021 11:36

Seatrium / SembCorp Marine- The new Frontier.

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You are right, there are 2 camps that are creating this situation.

The shortist, who is about 1-2 billion shares short, is of course trying to suppress the price.

The minority supporters who had recently contributed about S$750mil to Sembmarine don' t mind Temasek increasing their holding to above 50% and so is in no hurry to engage yet.

Lastly, Sembmarine is saving their ammunition (good news) til after the MGO because there is no use firing them now and spoil Temasek' s chance to buy more at the cheap.

ahbui8 ( Date: 29-Oct-2021 10:12) Posted:

7.9cts is created by market maker, so this show that market prefer TH MGO to become unconditional.

ahboy8 ( Date: 29-Oct-2021 09:29) Posted:

One thing I still totally don' t understand. TH offer to buy those unwanted shares at 0.08c. Most people/retails etc, are holding on to shares which is min. 0.08c(due to the last RI). If anyone want to sell any shares, why don' t just sell to TH? Don' t have to pay commission somemore. So if above is correct, why do those people want to sell at 0.079c and pay commission to broker? UNLESS, those selling at 0.079c are all short. This is making no sense.

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29-Oct-2021 11:27

Seatrium / SembCorp Marine- The new Frontier.

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Shuo De Hao!

pkli899 ( Date: 29-Oct-2021 10:54) Posted:

不停的数落，而且是重复又重复
都是老调重弹。为的是什么？
只为了争一口气，何必呢？
输掉的也不是你的钱
赢了也没有你的份
多管闲事是自寻烦恼
还是各家自扫门前雪
莫管他人瓦上霜的好
我做我的
你管你的
相安无事
和和气气
天下太平

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28-Oct-2021 22:29

Seatrium / SembCorp Marine- The new Frontier.

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Keppel did not say very much in its Q3 biz update.

There are different definition of profitable. Keppel' s definition of profitability for Keppel OM seems to be EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) positive.

In other words, they are saying Keppel OM is making money before you account for interest paid on debt (I), Taxation (T), Depreciation of equipments(D) and Amortisation of yard value (A) etc. As mentioned before, Keppel CEO Loh Chin Hwa is the best snake oil salesman around.

ttbanthony ( Date: 28-Oct-2021 21:08) Posted:

Mark this.
SCM will tear down all sell walls after mid November en route to 0.124.

Good news after results announcement (which have already factored in the anticipated huge losses).

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27-Oct-2021 18:27

Seatrium / SembCorp Marine- The new Frontier.

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Just bought a small bunch (300k) @ 8 cents to see who is the shortist.

The seller' s code is 07B.

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26-Oct-2021 11:04

Seatrium / SembCorp Marine- The new Frontier.

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Johan Castberg FPSO scope adapting to transportation window

Oct. 26, 2021

Sembcorp Marine has issued a progress update on its construction program for the Johan Castberg FPSO for the Barents Sea.

(Courtesy Equinor)

Illustration of the Johan Castberg FPSO.

Offshore staff

SINGAPORE &ndash Sembcorp Marine has issued a progress update on its construction program for the Johan Castberg FPSO for the Barents Sea.

Work on the hull and living quarters was advanced when COVID-19 occurred, resulting in restrictions that caused delays to the schedule. Then welding issues came to light, with the rectification measures broadening the scope of work required.

However, what remains now to be completed is small relative to the base scope, Sembcorp said.

The hull and living quarters are largely completed, but to accommodate the available transportation window for the towing operations to Norway, Equinor has requested adjustments to the remaining scope of work.

These are provided for in the terms of the contract and the two parties are currently finalizing the arrangements.

10/25/2021

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26-Oct-2021 10:23

Seatrium / SembCorp Marine- The new Frontier.

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May I know what do you agree and what do you disagree? Specifically about SCM welding being poor quality??

Hawker80 ( Date: 26-Oct-2021 09:44) Posted:

just saw this...

i agreed with chart_expert123 in some , but not all.

stanleytay ( Date: 26-Oct-2021 09:35) Posted:

I thought Hawker is an employee of SMM, Chart expert says work of smm is poor quality. You have anything to defend your company anot

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25-Oct-2021 23:16

Seatrium / SembCorp Marine- The new Frontier.

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Construction of Sofia OCP progressing well at Batam yard. Btw, Heerema is SCM' s buddy. All SCM offshore platform installation jobs give to Heerema. And guess who built Sleipnir?

KenzFigee to Deliver Crane for Sofia Offshore Converter Platform

OE Staff October 22, 2021

Artist Impression of the Sofia Offshore Wind Farm located on the Dogger Bank, UK Sector. - Credit: Kenz Figee

KenzFigee, a Dutch lifting equipment firm providing services for the offshore energy industry, will deliver an electric hydraulic Ram Luffing offshore crane for installation on the HVDC offshore converter platform for RWE' s Sofia offshore wind farm in the UK North Sea.

Under the contract signed with Iv-Offshore & Energy, KenzFigee will deliver a heavy-duty 3,000 type Ram Luffing crane, suited for harsh North Sea offshore operations.

" With its compact and robust design coupled with a limited number of moving parts, it is an ideal low maintenance offshore crane. The crane is equipped with a 40-meter long box boom which enables personnel handling and supply boat lifts of up to Hs-5m, according to EN13852-1, and platform lifts with safe working loads from 19 to 25 tonne," KenzFigee said, without sharing the financial details of the order.

To be built at the KenzFigee facility in Zaandam, the Netherlands, the crane will be shipped to Batam, Indonesia in the first quarter of 2022. Once in Batam, Sembcorp Marine will install the crane on the High Voltage Direct Current offshore converter platform being built for Sofia Offshore Wind Farm.

The offshore converter platform, at the heart of the wind farm, comprises a 17,000-tonne topside and jacket foundation structure piled into the seabed 220 km from the nearest shore.

According to Sembcorp Marine, the offshore converter platform will be one of the most powerful and most remote offshore converter platforms ever built.

Dutch offshore installation specialist Heerema Marine Contractors will transport and install the platform, with offshore installation works scheduled for 2024.

Heerema will install the platform using Sleipnir, the world' s largest semi-submersible crane vessel (SSCV). The vessel has previously executed work for the Hollandse Kust and Hornsea 2 offshore wind farms, and most recently, just this week, it installed the Hornsea offshore substation topsides for Ø rsted in the UK.

The 1,4GW Sofia Offshore Wind Farm, consisting of 100 Siemens Gamesa wind turbines, each with a 14MW capacity, will generate enough energy to power 1.2 million UK homes and will be one of the largest offshore wind farms in the world when completed. Located 195 km off the North East coastline of the United Kingdom, it will also be one of the farthest from shore

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25-Oct-2021 22:04

Seatrium / SembCorp Marine- The new Frontier.

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Both SCM and Keppel OM had already settled with Setes Brasil and the relevant authorties on the case and made the necessary provision in their books. Keppel OM was more seriously involved in the bribery and somehow had to pay fines amounting to USD422mil in end 2017.

So far, I am aware that Keppel OM has 3 outstanding lawsuits/ claims on its neck: EIG, Awilco drilling and an unnamed party regarding a FPSO job. EIG is a third party lawsuit pertaining to investment in Setes Brasil.

SCM on the other hand has no outstanding lawsuit or claim at the moment.

naoshingo ( Date: 25-Oct-2021 20:08) Posted:

KC lose a lot of money court cases and pay fines.....
I almost forgot about this case.
Hope the outcome will be favourable for the merger to take place soon.

Actually, SM is not that bad...

ttbanthony ( Date: 25-Oct-2021 19:28) Posted:

KOM litigation news. It means SCM can merge with it at bargaining power power? A few hundred million potential damages and will make the value cheaper for KOM.

Btw, funds enough for 2022. No apparent rights issue next year. Some projects gaining delivery fruition. Cash coming in.

Let it drop. I will continue accumulating?

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25-Oct-2021 14:56

Seatrium / SembCorp Marine- The new Frontier.

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Yes sir, do I have your permission to post freely too?

ckmpd1 ( Date: 25-Oct-2021 13:00) Posted:

well said! This is a public forum and any one who has any view can post. A mature forumner will welcome all views as long as they are not obscene or vulgar. Any forum who posts nonsense will lose credibility. Why are some forumners afraid of opposing views?? No one is compelled to read any post he does not like

chart_expert123 ( Date: 25-Oct-2021 12:55) Posted:

hatred will only be created when someone gonna scammed and resulting in losses.

There are plenty of objectives to participate posting in forum. Wasting time to doubt or even slander posting which go opposite is a childish and irresponsible approach.

Trade with care and do own due diligence after digestion of content of the post.

Hopefully TH can bring glory back to the industry. Singapore shall be diversified in all sectors, we shall appreciate the efforts from the gov. Or else like Taiwan fully rely on semiconductor, once the technology and expertise are picked up by other country, just a 30% reduction of a single industry can cause disaster to the country of economic

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Record Number of Floating Production System Awards Expected Over the Next 18 Months

Hey Changtai, you might be called up for work assignment soon. Offshore drilling rig reactivations have begun

Firms applaud relaxed border measures for India and Bangladesh, but call for more clarity

Grace Yeoh

" We' re a little bit happier that they' re relaxing (the rules), but they' re not clear on what is the relaxation. So probably we want a little bit more clarity," said Mr Ooi, who runs landscape and construction company Limelite Productions.

Johan Castberg FPSO scope adapting to transportation window

Construction of Sofia OCP progressing well at Batam yard. Btw, Heerema is SCM' s buddy. All SCM offshore platform installation jobs give to Heerema. And guess who built Sleipnir? KenzFigee to Deliver Crane for Sofia Offshore Converter Platform

Hey Changtai, you might be called up for work assignment soon.

Offshore drilling rig reactivations have begun

Construction of Sofia OCP progressing well at Batam yard. Btw, Heerema is SCM' s buddy. All SCM offshore platform installation jobs give to Heerema. And guess who built Sleipnir?

KenzFigee to Deliver Crane for Sofia Offshore Converter Platform