Newsletter

Preserving
the assets for
better days
Photo: Preben Nielsen, E-frame
Rig stacking has for more than a decade been a rare
phenomenon in the oil industry. With oil prices now at a much
lower level than they have been, that is about to change.
By Nicolai Ostergaard
It is clear
that our rigs
are going to
expe rience
more idle days
in 2016 than
we’ve seen in
the recent past.
MORTEN PILNOV,
HEAD OF GLOBAL SALES
When Maersk Guardian was towed
into Frederikshavn’s harbour on September
21, 2015, it made headlines in
the local media: it was the first time
the maritime capital of Northern
Jutland had had to make space for the
stacking of a rig.
But what has happened since
then?
Assistant Asset Manager Bram
Nabuurs has been in charge of the
working group assigned to prepare
for the stacking of Maersk Guardian
and carry it out.
“Within five days
of arriving in Frederikshavn,
we were
down to our planned
manning level of six
people,” explains
Bram Nabuurs.
The last crew
members on Maersk
Guardian have now
been assigned to preserve
the equipment
aboard the rig. They
maintain the critical
operational equipment
and operate it
periodically, running
the drawworks, top
drive, engines and mud pumps in
order to keep the equipment in good
condition.
“The crew members are in charge
of keeping the rig on a reduced-maintenance
regimen because of the lower
operating hours, as well as critically
assessing and reducing the tasks on
the maintenance to-do list wherever
that’s both possible and appropriate,”
says Bram Nabuurs.
More idle days
With up to 11 rigs coming off contract
in 2016, and in view of a bleak business
environment in which rig demand is
dropping, here at Maersk Drilling we
need to be prepared for the likelihood
that not all our rigs will go on a new
contract as soon as their old one runs
out. This is the message from Head of
Global Sales Morten Pilnov.
“It is clear that our rigs are going
to experience more idle days in 2016
than we’ve seen in the recent past,”
he says.
Maersk Guardian is not the only
rig being stacked at the moment.
In Singapore, Maersk Convincer is
preparing for what – hopefully – will
only be a short period of stacking. Towards
the end of December, Maersk
Developer will likely run off contract
and will arrive in Houston, where it
will be stacked until a new contract
is signed.
Prior to a rig running off contract
with no new assignment in sight, the
relevant department – Asset team,
Commercial, Technical Organization
and Finance – will come up with a
plan for how to stack it most efficiently,
taking into account the market
outlook for the rig in question and its
probable next assignment.
Please explain the procedure: does
Maersk Drilling automatically send
an idle rig for stacking if it doesn’t
get a new contract within a certain
time frame?
“When a rig runs off contract, we follow
the process in SIRIUS and consider
how likely it is that the rig will get a
new contract within a certain span of
time. During this process we will typically
establish some milestones – in
other words, potential contracts that
the rig will try to achieve. These are
windows of opportunity – a chance
to win a new contract. If the process
turns out successfully, the rig will get a
new contract,” explains Morten Pilnov.
He continues:
“If all these possibilities fail, we’ll
start to consider outright stacking.
We always begin with so-called utility
stacking. This means that the rig is
stacked while it is fully functional and
ready to leave for a new contract on
short notice. So, how far we proceed
from idle days to outright stacking
depends on the market potential for a
new contract in the near future.”
High contract coverage
What is the most positive thing you
can say about our position in this
bleak business environment?
“If we compare ourselves with
our competitors, we are blessed with
relatively high contract coverage for
2016 and 2017. This is immensely
significant for us, because it gives us
an important foundation for getting
through a period of oversupply and
very low day rates,” says Morten
Pilnov.
8 Maersk Drilling Newsletter 02·2015