Offshore focus: Jack-up rig maintenance

The MIS Group shipyard in Sharjah.

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When both the demand and price of hydrocarbons plummeted around 12 months ago many industry experts predicted a tough 2009 for many of the companies at the sharp end of oil production, not least the owner/operators of jack-up rigs.

Jack-up rigs provide oil producers with a flexible solution to offshore drilling for hydrocarbons. While renting them is not exactly cheap, the fact that they can be towed to almost any location, “jacked” to the sea bed and operational within a short period of time makes them the most economically viable solution to offshore producers.

When demand for oil started to decline in mid-2008, oilfield and marine services companies operating both on and offshore started to notice a dip in general activity across the Middle East. Dockyard across the region also noticed an upsurge in “warm stacking” – sending a jack-up rig back into port, but keeping the crew onboard and ready for work.

However, after enjoying day rates of between US$150,000-$175,000 against operating costs of around $45,000 for the three to four years prior to the downturn many operators decided that the time was right to send some of their rigs back to shore for essential maintenance and upgrade work.

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“During 2009 we witnessed a surge of maintenance, upgrade and repair works, as confidence grew in the market and owners went for upgrades and enhancements as well as the usual preventive maintenance,” Ian Anderson, marketing manager for the UAE-based offshore marine services providers Lamprell says.

Stephen Smith, corporate business development director at the Sharjah-based MIS Group states that his company’s clients have been more circumspect in regards to major upgrades: “In the current period, the majority of owners will only take care of the essential or ‘basic’ refurbishment needs required. e.g. work resulting from periodical audits etc, but are unlikely to take on major upgrade work,” he says.

With around 25% of the world’s jack-up rig fleet currently operating in the Middle East, competition has tightened for contracts and as a result many operators are now ensuring that their rigs offer both the latest technology as well as a high standard of living accommodation for the crew to ensure they steal a march on rivals with more outdated rigs.