KS in jack-up newbuild teamwork
By TAN HWEE HWEE Singapore
Singapore-listed KS Energy and Shanghai Zhenhua Heavy Industries (ZPMC) have teamed up to build a high-specification jack-up drilling unit in Indonesia.
The pair will join forces to build a Friede & Goldman JU2000E jack-up rig in Batam, the first rig of its kind to be constructed in Indonesia.
The rig construction will take place at a 20-hectare yard run by Citra Tubindo, an oilfield equipment manufacturer also owned by KS Energy’s Indonesian-born chief executive Kris Wiluan.
ZPMC will supply the parts and components required for construction of the F&G JU2000E.
The rig will take at least 24 months to deliver, suggesting its delivery will take place at the earliest during the second half of 2015.
No commercial terms were released on the cost of the high specification jack-up rig, but it is expected to fall within the under $250 million going price for an F&G JU2000E unit.
The latest rig building venture with ZPMC signifies Citra Tubindo’s first move into offshore rig building business.
Citra Tubindo has 30 years of experience in manufacturing oilfield equipment and has recently delivered two land rigs now understood to be drilling at ExxonMobil’s Banyu Urip oil project in Cepu, Indonesia.
The venture into offshore rig building is in line with the vision of Wiluan to contribute to the maximisation of Indonesia’s oil and gas spend within the country.
By his estimate, Pak Kris – as he is often addressed within the industry – said Indonesia spends about $15 billion to $20 billion a year on oilfield services and materials, a large part of which is still “done outside the country”.
He estimates the major South-East Asian oil and gas producing country will require at least 30 land rigs and 10 jack-up rigs within the next three to five years.
“It is our intention to maximise expenditure in the country,” he said.
KS Energy has concurrently formalised a 49:51 joint venture with Indonesia’s state-owned Pertamina Drilling to own and operate onshore and offshore drilling units.
The joint venture now owns and operates the two land rigs on charter to ExxonMobil at an announced contract value of $98 million.
It also owns and operates a recently upgraded Indonesian-flagged rig, KS Java Star 2, which went on a two-year contract with Pertamina Hulu Energi in the West Madura Offshore (WMO) production sharing contract, on delivery from Singapore-based Keppel Fels earlier this year, according to Pertamina Drilling’s president-director Faried Rudiono.
The KS Energy-Pertamina Drilling joint venture is in talks with Pertamina Hulu Energi on a further contract extension for KS Java Star 2 to support the massive drilling campaign lined up in WMO block over the next two years, Faried told Upstream.
The present two-year contract at WMO block is valued at $87.6 million, according to KS Energy.
KS Energy has acquired a F&G Super M2 jack-up unit to be named KS Java Star 2, from ZPMC, also to be owned and operated under its joint venture with Pertamina Drilling.
KS Java Star 2 is scheduled to be delivered from ZPMC during the first half of 2014 and is understood to be offered for a contract with Pertamina Hulu Energi’s Offshore Northwest Java PSC.