AWO Prospectus - COSL Drilling Europe AS

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Awilco Offshore <strong>AS</strong>A Accommodation units provide a flexible means of providing accommodation and service capacity to an offshore field. They are used for short- or long-term purposes whenever manning and/or deck capacity is required beyond the capacity of the fixed installation. The market is geographically divided into a few segments. Historically, accommodation units have mainly been used in the North Sea and Mexico. With the long-term chartering of five Prosafe units by Pemex in 2003, Mexico took over as a leading market for such units. The supply of accommodation units The current world fleet of dedicated accommodation units is limited and the most relevant units are summarized in the table below. Market / unit Owner Type Design Capacity (beds) North Sea Borgholm Dolphin Fred. Olsen Semi Aker H-3 600 MSV Regalia Prosafe Semi GVA 3000 243 Port Rigmar Awilco Offshore Jack-up Robin 300 326 Port Reval Awilco Offshore Semi Aker H-3 362 Pride Rotterdam Pride Jack-up Gusto 200 Gulf of Mexico MSV Chemul Pemex Semi GVA 2000 433 Jasminia Prosafe Semi GVA 2000 600 Jupiter I Cotemar Semi Small semi 720 Safe Britannia Prosafe Semi Pacesetter 812 Safe Hibernia Prosafe Semi Aker H-3 500 Safe Lancia Prosafe Semi GVA 2000 600 Safe Regency Prosafe Semi Pacesetter 780 Other markets Safe Astoria Consafe Offshore Semi Sedco 600 256 Safe Concordia Consafe Offshore Semi 376 Safe Caledonia Prosafe Semi Pacesetter 550 Safe Scandinavia Prosafe Semi Aker H-3 527 Source: Fearnley Fonds In addition to the units set forth above, there are several units that are used for accommodation purposes in special markets, but these can not be deemed relevant for competitive purposes. This includes some small shallow-water units being employed in the Southern North Sea, barges being employed in West Africa, construction platforms, diving ships, and a limited number of emergency stand-by units. Also, conventional drilling rigs do, from time to time, operate as accommodation units, but this is mainly on short term contracts with limited bed capacity requirements (100-150 beds, i.e. below the capacity of conventional accommodation units). The world fleet of accommodation units has declined significantly over the last 15 years, as several units have been converted into drilling rigs. With a fleet of about 20 units, there was a large overcapacity of accommodation units in the North Sea in the early to mid-1990s as many of the large construction projects came to an end. Over the last years, three units have been converted into accommodation mode. This includes the Company’s unit Port Reval, formerly a service rig, the Fred. Olsen unit Borgholm Dolphin which was formerly a cold-stacked drilling rig, and the Consafe Offshore unit “Safe Astoria” which was also formerly a cold-stacked drilling rig. There is currently one additional rig undergoing conversion into accommodation mode for account of Consafe Offshore. The unit will be named “Safe Bristolia” and will be delivered towards the end of 2005. This unit is being converted from a formerly cold-stacked drilling rig to a 550 bed 28
Awilco Offshore <strong>AS</strong>A accommodation unit at Yantai Raffles Shipyard in China. The unit is contracted to commence operation in the Far East region, and will not be suited for North Sea operation. While additional conversion into accommodation mode may take place, the number of rig structures available for such conversion is little. In the present strengthening market for drilling rigs, the owners generally seek to have their marginal units employed in drilling mode rather than investing in conversions. Consafe Offshore has recently taken delivery of the accommodation and service unit “Safe Concordia”, the first new building in more than 15 years. The unit was built at Keppel FELS in Singapore. It will not be suited for North Sea operation. Demand for accommodation rigs There are several sources of demand for accommodation units, linked to the various phases of the oil fields. These include; Installation and commissioning • Support services during installation and testing of new fixed installations. In the North Sea such activity was formerly a large market, but has now become a minor part of demand. The market in Mexico has been stable to growing over the last 5 years. Additional growth is expected in deepwater provinces as West Africa, Brazil and South East Asia. • Support services during hook-ups of satellite fields to existing installations (growth niche in the North sea with a number of subsea tie back prospects). Production and maintenance • Support services during upgrading and maintenance on fixed installations (the major part of the North Sea market). • Stand-by and hospital services (small part of the market); • Long-term addition of accommodation capacity on producing fields (small part of market). Abandonment • Abandonment and de-commissioning of fixed installations (small but growing part of the market). The key demand drivers are oil companies’ spending on new offshore production facilities and upgrades to enhance production from fields in operation. As further discussed in section 6.3, the level of such spending is strongly correlated to expectations for future oil and natural gas prices, the requirement to grow production at a sustainable rate and the need to replace production lost through depletion. The North Sea and Mexico have, historically, been the prime markets for such units. In addition emerging markets as West Africa and Australia have absorbed 1-2 units over the last few years. Also, prospects for further growth are identified in other key offshore provinces as Brazil and South East Asia. The current large market in Mexico (currently 8 out of total 14 floating accommodation units in the world are employed in Mexico) is for a large part linked to new installations. All of the 8 units are fixed on firm contracts beyond 2006. While ongoing, this is a very stable market, and the long term outlook is stable to growing. In the North Sea, the market is to a much larger extent based on maintenance and upgrading service on existing fields, as the installation phase is mainly past. This includes both planned maintenance and 29
Page 1 and 2: Prospectus Listing of the shares of
Page 3 and 4: Table of Contents Awilco Offshore A
Page 5 and 6: Awilco Offshore ASA Statements of r
Page 7 and 8: Definitions Awilco Offshore ASA And
Page 9 and 10: Awilco Offshore ASA The project pri
Page 11 and 12: Awilco Offshore ASA 2. Summary in N
Page 13 and 14: 2.2 Finansielle forhold Awilco Offs
Page 15 and 16: Awilco Offshore ASA d. The pre-empt
Page 17 and 18: Awilco Offshore ASA In the event of
Page 19 and 20: 4. Company description 4.1 Company
Page 21 and 22: Awilco Offshore ASA 4.3 Relation to
Page 23 and 24: Awilco Offshore ASA Capacities: Var
Page 25 and 26: Contracts No contracts have been se
Page 27 and 28: Awilco Offshore ASA (1983) and hold
Page 29: 6. Market overview 6.1 Market posit
Page 33 and 34: Jack-ups Jack-ups have legs that ar
Page 35 and 36: Awilco Offshore ASA The fleet of
Page 37 and 38: Awilco Offshore ASA the regime. An
Page 39 and 40: Awilco Offshore ASA The useful live
Page 41 and 42: Awilco Offshore ASA Balance sheet A
Page 43 and 44: 7.5 Auditor’s statement Awilco Of
Page 45 and 46: Awilco Offshore ASA 8. Share capita
Page 47 and 48: Awilco Offshore ASA Shareholder pol
Page 49 and 50: Awilco Offshore ASA In addition to
Page 51 and 52: Awilco Offshore ASA 1. The Contract
Page 53 and 54: Awilco Offshore ASA Keppel Option A
Page 55 and 56: Awilco Offshore ASA 2. A pre- and p
Page 57 and 58: 10. Taxation 10.1 Introduction Awil
Page 59 and 60: 10.4 Inheritance tax Awilco Offshor
Page 61 and 62: Awilco Offshore ASA Political risks
Page 63 and 64: Awilco Offshore ASA Appendix 1 Rig
Page 65 and 66: Awilco Offshore ASA 63
Page 77 and 78: Awilco Offshore ASA Appendix 6 Firs
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Awilco Offshore ASA 79
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Filipstad Brygge 1 PO Box 1363 Vika
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