Thursday, March 20, 2008

Chinese yards in jack-up frenzy

A hot offshore rig market in China has spawned a flurry of orders at Chinese fabricators, with Offshore Oil Engineering Company about to secure an order for four jack-ups and with Yantai Raffles Shipyard forging plans to bear the risk itself by building speculative jack-ups at its own-cost.

Increased offshore oil and gas activities, particularly in the Bohai Bay shallow waters, have triggered a hefty increase in China's rig demand. At least 18 jack-ups are already being built or on order at Chinese yards for developing oil and gas fields off China. Most of these rigs, scheduled for delivery in about 2010, are owned by China Oilfield Service Ltd (COSL), the drilling service unit for top offshore oil and gas operator China National Offshore Oil Corporation (CNOOC). CNOOC has worked out an ambitious plan to increase annual oil and gas production in Bohai Bay from about 20 million cubic metres of oil equivalent at present to 30 MMcm by 2010, at which time it will account for about 50% of CNOOC's total output.

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