Business | Oil & Gas
UAE poised to be alternative oil rig construction and repair centre
The UAE will become an alternative oil rig construction and repair centre as the country's handful yards are growing busy with major international orders, sources said.
- By Saifur Rahman, Business News Editor
- Published: 00:00 October 13, 2006
- The UAE is bidding and negotiating for Dh2.2 billion worth of new buildling projects.
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Dubai: The UAE will become an alternative oil rig construction and repair centre as the country's handful yards are growing busy with major international orders, sources said.
"Due to a worldwide shortage of rig construction facilities and larger demand for more new buildings, the UAE-based rig repair yards are going to get their share of the contracts," Tony Bromham, partner and technical director of QGM Group, told Gulf News.
"Major contractors including those in Singapore are booked till 2010. So the new demand has to be met by emerging contractors in the Gulf like us. We are getting increasing numbers of inquiries as we are currently bidding and negotiating for Dh2.2 billion ($600 million) worth of newbuilding projects."
The Gulf is the fourth largest region in terms of rig fleet with 81, following North America which has 293, North Sea (Europe) with 160 and Southeast Asia with 139.
Global demand for rigs is growing fast with offshore fields getting busier. Looking at jackup rig contracts already in place for the next two years, it is easy to see where day-rates are heading.
"For January 2007, there are currently 298 jackups that will be under contract during the month, which accounts for 74 per cent of the fleet, and those rigs are set to be earning about $20,000 (23 per cent) more per day than they were last month. At this point, about 50 per cent of the fleet is contracted through the end of 2007, with day rates averaging $132,000 for those contracts," said a recent report.
Reuben Segal, project manager at Noble Denton marine consultants, earlier told Gulf News, "The market is showing signs of strong growth as the demand for new rigs are growing. Most rig contractors have a backlog of orders up to 2010. That's why UAE has a good chance."
He said, for long, yards have been maintaining and upgrading rigs. This is the first such contract to have been awarded to any yards in the Middle East.
About five major players - National Petroleum Construction Co and Adyard of Abu Dhabi, Dubai Drydocks, MIS, Lamprell - are currently serving the growing needs of the global market.
Dubai Drydocks earlier this year, entered ship building business.
QGM group's manpower increased from 50 last year to 1,200 to date, as the company expands its business at three land sites in Hamriyah Free Zone. "The UAE has now become a major centre for for the construction and repair of offshore rigs and is capable to meet the local, regional as well as international demand and we currently possess all the resources and technical knowhow," said Chris Walton, commercial director of QGM.
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