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Thread: This is almost surreal..."Maersk places $1.3B drillship order"

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    Default This is almost surreal..."Maersk places $1.3B drillship order"

    Just when you thought it was safe to go back in the water, comes this posted earlier on gCaptain

    Maersk places $1.3B drillship order from Samsung Heavy Industries


    July 5th 2011



    Maersk Drilling, a business unit within the A.P. Moller- Maersk group, has declared its option to build two ultra deepwater drillships at Samsung Heavy Industries in South Korea.

    The drillships are scheduled for delivery in the second and third quarters of 2014, respectively. The total project cost for the two drillships is approximately USD 1.3 billion, which includes a turnkey contract with the yard, owner furnished equipment, project management, commissioning, start-up costs and capitalized interest. Simultaneously, Maersk Drilling has obtained a new option for the construction of two additional drillships.

    “We have an ambition of becoming one of the leading drilling contractors in the ultra deepwater segment and this order is another important step in taking a bigger share of this attractive market segment,”says Claus V. Hemmingsen, CEO of Maersk Drilling and member of the Executive Board of the A.P. Moller – Maersk Group. “The order reflects our commitment to grow our rig fleet enabling us to serve our customers in the ultra deepwater segment on a more regular basis,” Claus V. Hemmingsen continues.

    Year to date, Maersk Drilling has invested USD 3.8 billion in two new jack-up rigs and four drillships.

    Maersk Drilling had a revenue of USD 1.6 billion and a profit of USD 399 million after tax in 2010. Hemmingsen sees a strong market for deepwater drilling rigs as the global demand for oil is increasing while at the same time production from mature fields is declining.

    “This means that about six times the current Saudi production must be brought on stream over the next 20-25 years which will drive a solid growth in the demand for drilling services. The main part of this growth will take place in frontier areas such as deepwater,” he says.

    The two drillships will be of similar design to the two drillships Maersk Drilling ordered from Samsung in April 2011. The 228 meter long drill ships will be able to operate at water depths up to 12,000 ft (3,650 m) and will be capable of drilling wells of more than 40,000 ft (12,200 m).

    Similar to the design philosophy on Maersk Drilling’s ultra deepwater semi-submersibles the drillship design includes features for high efficiency operation including a dual derrick, which allows for parallel and offline activities. The extensive storage areas and tank capacities provide an advantage when operating in areas with less developed infrastructure and limited presence of suppliers. Together with the higher transit speed the increased capacity will reduce the overall logistics costs for the oil companies. The drillships will have accommodation capacity for 230 people.
    I am simply stunned....never in history has there been a rig building boom like we are experiencing these past four years and there appears to be no end in sight. Oil has got to be headed for $200/bbl or this would not be happening!
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    Default Re: This is almost surreal..."Maersk places $1.3B drillship order"

    No wonder I paid $4.36 per gallon this morning in California.
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    Default Re: This is almost surreal..."Maersk places $1.3B drillship order"

    Quote Originally Posted by capitanahn View Post
    No wonder I paid $4.36 per gallon this morning in California.
    This current run up is principally the result of the uncertainty of the Iran situation and that the majors are anticipating a coming war which will push the price of a barrel of crude to astronomical heights. I think it is very clear now that all the oil companies have known that this was coming right about now. When the war ends, not be surprised if the price never goes below $150 ever again hence the building off all these ships and rigs. Their profits are going to go ballistic!
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    Default Re: This is almost surreal..."Maersk places $1.3B drillship order"

    hate to say it but peak oil is startin to rear its ugly head
    "And if you gaze for long into an abyss, the abyss gazes also into you." -Friedrich Nietzsche

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    Default Re: This is almost surreal..."Maersk places $1.3B drillship order"

    This makes for interesting food for thought

    8 reasons why gas will hit $5 a gallon this year

    By Paul Ausick and Douglas A. McIntyre, 24/7 Wall St.

    The price of gas is a widely covered news item these days. Oil prices have moved up from $75 a barrel in October of last year to more than $100 a barrel currently. And the trend continues to point toward even higher oil prices. Of course, along with the price of oil, gas prices have also risen, almost in lockstep.

    The price of gasoline today is 10 percent higher than it was just two months ago. The average price for a gallon of regular is almost $3.62. Gas prices in January have been the highest ever recorded price for that month. Many economists and energy analysts believe a rise to $4 a gallon is inevitable. But their estimates could be grossly understated. Gas will reach $5 a gallon before the end of the year.

    Two warring trends are pushing and pulling gas prices. On the one hand, Americans now drive less than at any time in the past 11 years. On the other hand, gasoline and oil inventories are at very low levels around the world, and traders believe that supply will tighten significantly. The fact that Americans drive much less will not offset an interruption of supply from the Middle East, a decision by refineries to charge more to turn oil into gasoline, or higher demand from emerging economies like China and India.

    24/7 Wall St. reviewed the major reasons that gas prices have risen in the past quarter and analyzed whether the causes will improve or worsen. We have estimated how much each factor could increase gas prices. Together, those increases would be enough to push gas prices up by another $1.50.

    1. Strait of Hormuz
    About 20 percent of the crude oil produced in the world is shipped through the Strait of Hormuz, and Iran has threatened to shut down shipping traffic through the Strait. At its narrowest, the passage is 30 miles wide, so there is a realistic case that a conflict could close it. Iran has already been isolated as a trade partner by U.S. and EU sanctions. The regime in the country has made a number of threats about what it might do if its “national interests” were threatened. If Iran follows through with its threats, the period the passage is closed could be very brief if the U.S. Navy, which has a carrier group in the region, moves to reopen the lane. But it is not clear that the American government would make that decision without the open support of allies or the United Nations. A closure of the passage, or any escalation that would make a closure more likely, will drive oil prices higher -- and by extension, gasoline prices.

    2. Iran
    Iran contributes to a second problem in terms of global oil supply well beyond that of its ability to interrupt supply. Because of the embargo against the nation due to nuclear weapons violations, the U.S. has pressured large oil importers such as Japan to act to isolate Iran by cutting their imports. This puts Japan in a position in which it has to tap even tighter global supply. Japan apparently has agreed to cut its Iranian crude imports by 20 percent. But as the world’s third largest oil importer, Japan indeed will have to get its oil somewhere other than Iran -- which will put more pressure on current production.

    3. Refiners raising prices
    Most of the oil refined on the east coast of the U.S. is Brent crude, a type of oil produced from the North Sea. The price of Brent -- more than $124 a barrel -- is almost $16 higher than the price of West Texas Intermediate (WTI) crude, the amount most people read about in the media. But because Brent has replaced WTI as the global price benchmark, U.S. refiners set prices for gasoline and other products as if Brent were the only grade of crude used. That allows refiners with access to cheaper WTI to make larger profits.

    However, when the prices converge, as happened in the final two months of 2011, WTI refiners lose their edge -- and their hefty profits. “Refiners were losing money in November and December. You can only lose money for so long,” John Felmy, chief economist for the American Petroleum Institute, recently said. Many large refineries are owned by public companies that do not have much appetite for posting ongoing losses. To avoid losses, refiners will have to increase gasoline prices.

    4. Other geopolitical risks
    Iran does not present the only geopolitical challenge to oil production. In Nigeria, which is the 14th largest producer of oil in the world, Islamic terrorist group Boko Haram has continued to attack Christian areas of the country. The Nigerian Army has reacted by attacking Islamists. Militants have continued to attack pipelines, apparently in a move to disrupt the government.

    Meanwhile, there are concerns about supply even from Venezuela. Venezuela is the world’s 11th largest producer of crude. The regime there has been fairly stable under the 13-year reign of Hugo Chavez. But Chavez is due for a second cancer surgery later this month. The Miami Herald recently wrote that “some analysts question his ability to hold onto the presidency through the current election cycle.”

    Other parts of the Middle East and Africa are also in turmoil. Analysts recently mentioned Bahrain, Libya, Iraq, Nigeria and Yemen as political flashpoints. “The world faces oil supply risks from a multitude of sources, not only in the Middle East but also in Africa. In our view, not since the late 1970s/early 1980s has there been such a serious threat to oil supply,” Soozhana Choi, Deutsche Bank’s head of Asia commodities research, said in a note to clients recently. All these flashpoints translate to further concerns about oil supply. And when oil supplies are tight, the price of oil -- and gasoline -- increases.

    5. The EU may save itself
    For now, Greece has been bailed out again -- a move that should buoy confidence in the region and encourage demand for oil. Even with the Greek bailout, however, the eurozone is not out of the woods as nations continue to implement austerity measures to protect against the risk of default on sovereign debt.

    While some experts believe the risk of defaults in the region is overblown, several economies in the eurozone continue to be in trouble. According to a recent European Commission forecast, the eurozone GDP will contract 0.3 percent, driven in part by deep recessions in several southen EU nations, including Spain and Portugal.

    Either way, deepening financial and economic trouble in Europe would drop demand for oil there. However, if leaders in the region can settle on mechanisms to protect nations with financial problems from default, national budgets will not be cut to extraordinarily low levels -- levels that would otherwise kill both consumer demand and business demand for oil.

    6. U.S. economic recovery
    An improved U.S. economy means higher oil prices. U.S. GDP, employment and even housing have all staged unexpected improvements in recent months. Many economists now peg a 2012 GDP increase at more than 2 percent. The new White House budget assumes growth of 3 percent by 2013. An average of more than 100,000 jobs has been created in each of the past six months. And an extension of payroll tax cuts through the end of this year may further aid the employment recovery. An extension of unemployment benefits means that hundreds of thousands of American who would have no income, will have at least enough to consume basic goods and services. The argument that Americans now drive less is not a powerful one for gas and oil demand when a healthy economy also means more consumption of oil for business, petrochemicals and jet fuel. Demand for oil-based products across the entire economy will pick up with any recovery.

    7. Summer
    In the U.S., summer vacation driving has historically boosted demand for gasoline. Over the past three or so years, however, that boost has been small, if present at all. In 2011, U.S. traffic volume decreased year-over-year in every month except January and February. But that was last year. So long as the U.S. economy continues to improve, more drivers will be on the road this summer.

    8. Supply risk
    In December 2011, OPEC members produced nearly 31 million barrels a day, cutting the cartel’s spare capacity capability from 3.18 million barrels per day to 2.85 million. Saudi Arabia accounts for 2.15 million of those daily barrels of spare capacity.

    Whether this data is accurate is arguable. What is not arguable is that starting to pump the spare capacity will take time, which will not be very helpful in the event that the Strait of Hormuz is closed or some other geopolitical risk is realized.

    Then there is Russia, the world’s first or second largest producer, depending on which day you look at the data. The OECD is counting on Russian production to make up for some of the short supplies and to grow by 1.4 percent to 10.72 million barrels a day in 2012. Russia grew its production by 1.2 percent in 2011. An additional gain of 17 percent in 2012 could signify that the OECD is hoping that Russian production can grow even more. There is no guarantee that Russia will deliver.

    Supply from Canada, the U.S., Australia and Brazil is expected to rise in 2012, though North Sea production is expected to fall. The OECD estimates global demand in 2012 of 90 million barrels a day and global supply essentially equal to projected supply. Nothing about that state of affairs should lead anyone to a conclusion that prices will fall.
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    Default Re: This is almost surreal..."Maersk places $1.3B drillship order"

    I wonder what the CEO of Sunoco has to say about shutting down their refineries on the Delaware river... I really don't understand why people are shocked that gas will hit $5/gal. In Europe, it's about $8/gal.. So much for companies reinvesting their profits back into their company..
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    Default Re: This is almost surreal..."Maersk places $1.3B drillship order"

    I wonder what the CEO of Sunoco has to say about shutting down their refineries on the Delaware river
    I have heard that those refineries were so old, inefficient and costly to run that they needed to be closed but why in the HELL does our government allow refined petroleum into the US without duty being paid on it? Europe with more modern and effcient refineries can literally produce clean product for less than it can be refined in the US! A couple of pennies for spill fund and otherwise the cost of shipping on foreign flagged vessels with Indian officers and Philipino crews.

    Just like the jobs in the GoM which should be going to Americans, here is another case of giving the baby away with the bathwater. It should be jobs for American construction workers to build new, clean, efficient refineries, Americans to operate them and Americans to man the vessels distributing that product. Lose, lose and lose again!

    oh so sad...so very sad
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    Default

    .............
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    Default Re: This is almost surreal..."Maersk places $1.3B drillship order"

    ...........
    ??????????
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    Default Re: This is almost surreal..."Maersk places $1.3B drillship order"

    Quote Originally Posted by c.captain View Post

    Just like the jobs in the GoM which should be going to Americans, here is another case of giving the baby away with the bathwater. It should be jobs for American construction workers to build new, clean, efficient refineries, Americans to operate them and Americans to man the vessels distributing that product. Lose, lose and lose again!

    oh so sad...so very sad
    You figure that Obama would try to work on some infastructure jobs... i dunno creating jobs that would help make petroleum refining more efficent would be a great way to spend our tax $$. I don't think that anyone could argue with that.

    I got offered my old job at Cal Dive through C-Mar America for $50 more a day.. Yet the other DPO (a canuck) was getting over $850/day with his US taxes paid+ annual bonus.
    My understanding is that they have been allowing foreign vessels to operate with impunity in the GoM since the 1970s.. So I assume that it's been going on since then. So people can't blame Obama for everything that is limiting jobs and growth but should be blaming Carter, Reagan, Bush...
    After seeing ships parked outside the shipyards in South Korea, I think it's retarded that the US gov't doesn't help companies buy newer ships and flag them US. But there must be some reason that the Unions are not fighting for it... Cash for Clunkers- The Ship Edition. But a war with Iran will make them fat cats again..
    We are losing but some F'ing Bastards are winning and winning big...
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    Default Re: This is almost surreal..."Maersk places $1.3B drillship order"

    We are losing but some F'ing Bastards are winning and winning big...
    That my friend has all been very clearly documented by me in this forum previously and I would love to reengage the topic again...it needs to be at the forefront of every American mariner to force to be changed.
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    Quote Originally Posted by Skoidat69
    I wonder what the CEO of Sunoco has to say about shutting down their refineries on the Delaware river.

    The newest refinery on the Delaware river is ~50 years old...
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