Ali Al-Muhairy

Keynote address by:
Ali Al-Muhairy
Senior Vice President (Drilling & Logistics)
ADMA-OPCO
Jack-up Rigs & Lift-Boats (Barges)
Future Trends
Agenda
J/Up Rigs
Lift Boats
 Oil Supply & Demand
 Long Term Strategy
 Ageing Rig Concerns
 Requirements
 Benefits
 Opportunities
Slide No: 3
Oil Supply & Demand
Slide No: 4
Oil Price Vs. Rotary Rig Count
4,500
140
4,000
120
3,500
100
3,000
80
2,500
60
Rotary Rig Count
2,000
40
World Oil Price
1,500
20
Slide No: 5
Jul-15
Apr-15
Jan-15
Oct-14
Jul-14
Apr-14
Jan-14
Oct-13
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
0
Jan-11
1,000
The Construction Boom
Of Mobile Offshore Drilling Units
Source : Mckinsey
Slide No: 6
Rig contracts 2010-2015
Source : Boston Consultants
Slide No: 7
Factors Affecting Future Growth
Slide No: 8
Overall Jack-up Rig Inventory
Slide No: 9
Ageing Rigs
Activity
Financial
Considerations
Upsides
Downsides
Divest
Them
Move assets and
liabilities off your books
Frees up capital for
ongoing support &
maintenance
Likely to accept lower sale
prices due to market
conditions
Spin Off
Restructuring of the
parent & child business
requires capital & new
processes
Removal of cash flow and
ongoing expenses
required to support the
older rigs in the fleet
Loss of stable revenue
Loss of asset value off the
balance sheet
Stack
Costly to manage and for
the actual stacking costs.
Reactivation can be
complex & costly
Removes a large portion
of Opex and ongoing
maintenance costs
Adds in CAPEX for any
reactivation and special
periodic surveys to get
the rig working again
Slide No: 10
Ageing Rigs
Activity
Financial
Considerations
Upsides
Downsides
Upgrade
(RIAP & IA)
Requires a capital
investment program &
investment in people,
processes & skills
Maintains day rate
revenue and contract
backlogs
Projects are complex
and more susceptible
to fail against time and
budget targets
Replace Them
with New
High capital investment
and financing required.
Added management &
delivery costs
Higher day rate income
Better fleet utilization
Lower initial
maintenance costs
Delays to new build
delivery & influx of high
spec new builds likely
to impact demand
Conversion to
Other (MOPUs,
Accomm.)
High capital investment
and financing required.
Added management &
delivery costs
Higher day rate income
Better fleet utilization
Lower initial
maintenance costs
Delays to new build
delivery & influx of high
spec new builds likely
to impact demand
Slide No: 11
What do we do in RIAPs?
Slide No: 12
What do we do in RIAPs?
Slide No: 13
What do we do in RIAPs?
Slide No: 14
Are Lift-boats / Jack-up
barges here to stay?
Lift-Boats : Facts & Figures
Slide No: 16
Why Lift-Boats/Barges Make Sense
in Today’s Market?
 Offshore markets are in a
downturn & use of liftboats make economic sense
during this market situation
 Demand for lift-boats which are mainly involved in
production, maintenance, multiple purposes, special
projects of existing oilfields, should remain robust.
Slide No: 17
Lift-Boats/Barges : The Welcoming Change





Designs are more robust
Equipment is now state-of-the-art, Increased reliability
Have transformed from Lift-boats to Jack up Barges
Increased Accessibility to existing fixed platforms.
Provides very specialized services: Heavy Lift Jack ups,
cost-effective well intervention, maintenance, installation
work-scope, EOR campaigns, Low-Sal projects etc.
We expect 2-fold increase in fleet
During the next 5-10 years
Slide No: 18
Lift-Boats/Barges : Challenges & Opportunities




Deck space & Weather conditions
Availability of 4-leg Vs. 3-leg lift-boats
Managing tight schedules (rig/barge)
Frequent Barge movements (9-10 days)
 Comprehensive & long-duration work
programs (Low-Sal, EOR)
 Custom-design and integrated services ready barge to avoid downtime and
achieve minimal capital cost
Slide No: 19
Thank You