Great leap ahead for KS Energy
By TAN HWEE HWEE Singapore
KRIS Wiluan, the Indonesian-born chief executive of Singapore-listed KS Energy, is taking a big step towards his ambition of seeing Indonesia able to provide the full suite of oilfield services by lining up a deal to build a jack-up drilling rig at his Batam facility.
Over the weekend, Kris unveiled a potential collaboration between KS Energy and Shanghai Zhenhua Heavy Industries (ZPMC) to jointly build a Friede & Goldman JU2000E jack-up rig at Citra Tubindo, an oilfield equipment manufacturer also owned by Kris.
Now occupying 20 hectares of land within Kris’s 600-hectare Kabil Industrial Estate, Citra Tubindo was set up in the 1970s to fulfill his vision of maximising oil and gas investment stemming fom Indonesia’s hydrocarbon production within the country.
Indonesia spends about $15 billion to $20 billion on oilfield services and products every year, according to Kris. By his estimate, the percentage of oilfield services spending going to domestic players has risen to as much as 50%, a vast increase since the 1970s, but Kris feels more can be done within the country.
Over the past 30 years, Citra Tubindo has expanded its customer base from the east to the west. Aside from sales within Asia, its products are reportedly sold to Japan, the US and the Middle East.
Kris’s latest ambition is to get involved in the construction and supply of Indonesian drilling units — both onshore and offshore rigs — at his Batam-based facility.
Citra Tubindo has already delivered two “walking” land rigs to KS Energy and its state-owned partner for Indonesia-focused company Pertamina Drilling.
The land rigs have started drilling at the ExxonMobil-operated Banyu Urip oil project in the Cepu block and are beating the projected work schedule on the planned wells, according to Kris. Building a jack-up drilling unit will be the next logical step up for Citra Tubindo and partnerships with other seasoned rig builders in Asia would ease its entry.
The partnership with ZPMC, assuming it is finalised, will see the Chinese rig builder supply the parts and components to Citra Tubindo for the construction of initially one F&G JU2000E unit.
ZPMC is also the majority shareholder of Houston-based rig design house F&G, but the commerical terms of the potential licensing agreement for the JU2000E design with Citra Tubindo remain undisclosed.
No cost projection has been made available for Citra Tubindo’s first JU2000E unit, although it is widely expected to fall under the $250 million bracket, the going price for similar rigs in the market.
Kris sees potential to extend the rig building partnership with ZPMC to a second JU2000E. But he is also keen to engage seasoned Singapore rig builders SembCorp Marine and Keppel Fels, which account for 70% of the world’s modern jack-ups.
The first JU2000E to be built at Citra Tubindo is expected to hit water within 24 months and will be marketed worldwide.
Indonesia will need as many as 10 jack-ups in the near-term, although these are likely to be 300-foot to 350-foot units, according to Kris. He also sees demand for at least 30 land rigs for Indonesian operations, with Pertamina Drilling primed to invest in one or two newbuild units annually.
Pertamina Drilling is close to sealing a newbuild deal with Citra Tubindo for another land rig, he added.