Home / Microsites / Global and Regional Markets / Transocean CEO: Younger fleet, new technologies can put offshore drillers on solid footing in post-downturn landscape

Transocean CEO: Younger fleet, new technologies can put offshore drillers on solid footing in post-downturn landscape

Twitter
Visit Us
Follow Me
YouTube
LinkedIn
Share

By Stephen Whitfield, Associate Editor

Offshore drillers have been dealt a tough hand amid the COVID-19 pandemic and oil price downturn. However, contractors can put themselves in a position to not only survive the downturn but thrive in its aftermath, said Jeremy Thigpen, President and CEO of Transocean. In a keynote address given during the 2020 IADC World Drilling Conference on 9 December, he outlined the steps his company has taken to prepare for an eventual recovery.

One of those steps, the maintenance of a young, valuable fleet of rigs, has been long in the making. After the previous downturn started in 2014, Transocean already committed to transforming its fleet, Mr Thigpen said. The company has since scrapped 59 floaters and completely exited the jackup market to focus on high-specification ultra-deepwater and harsh-environment floaters.

The average age of Transocean’s floaters has dropped from around 21 years in January 2014 to just nine years in December 2020. Further, ultra-deepwater and harsh-environment floaters make up 100% of its fleet today, as opposed to 45% of its fleet in January 2014. The company is also spending $2.25 billion on a pair of 20,000-psi drillships, the Deepwater Titan and Deepwater Atlas, which are expected to be delivered in 2021.

Mr Thigpen described the company’s younger assets as “far safer, far more reliable and far more efficient” than its legacy fleet, and the the company is hoping to take advantage of expected increases in near-term floater demand.. Citing offshore rig statistics from Rystad Energy, he noted that global floater demand saw a significant drop in the immediate aftermath of the previous oil price downturn, with year-on-year demand decreasing by 14% in 2015, 30% in 2016 and 23% in 2017. Rig demand saw modest year-on-year growth in 2018 and 2019 before falling again in the wake of the current downturn. Rystad estimated that the floater market in 2020 will decline by 14% from 2019 levels before bottoming out in 2021.

After 2021, floater demand is expected to increase, with Rystad forecasting double-digit positive year-on-year growth in 2022, 2024 and 2025, while 2023 is estimated to see a 4% increase. Mr Thigpen said Transocean has positioned itself to take advantage of that future.

“When we can get oil prices to move upward, the question becomes, are customers going to start reinvesting in the business? Where do they place their investment? Is it going to be in shale, is it going to be somewhere else, offshore, deepwater? We’re seeing a dramatic drop in investment today, as you would expect given the circumstances, but as you look out to 2022 and 2023, you could see… dramatic increases in floater demand. We’re hopeful that happens,” Mr Thigpen said.

Technology will also be critical for adding value in the near-term future. Given the duration of the downturn, Transocean has had to prioritize its investments in this area, shelving some planned developments and slowing the adoption of other new technologies. But a few top-priority technologies remain on the docket, with the aim of making offshore projects more competitive with US onshore. One such technology is the aShear, a kinetic blowout stopper (KBOS) shear ram unit based on military-grade ballistics that Transocean is currently developing with Kinetic Pressure Control. Mr Thigpen said Transocean has been working with several companies on using aShear, and it hopes to deploying the technology in the US Gulf of Mexico sometime in 2021.

Transocean has also upgraded six rigs with its automated drilling control system over the past three years, and it installed a hybrid energy storage system on the Transocean Spitsbergen semisubmersible in October 2019. The system captures energy generated during normal rig operations that would’ve otherwise been wasted, then uses that energy to power the rig’s thrusters. In addition, the company’s Smart Equipment Analytics system, a customized analytics package that uses sensors to evaluate real-time operational data, maintenance data, power consumption and emissions, is running on 19 rigs.

“All of these technologies help in improving our reliability and efficiency,” Mr Thigpen said. “They also help us reduce our overall impact on the environments in which we operate, because we’re deploying technologies that provide even more barriers to mitigate the possibility and severity of either a process or a personal safety event. They’re also technologies that enable us to deliver campaigns more quickly, using less fuel and reducing our impact on the environment.”

Leave a Reply

Your email address will not be published. Required fields are marked *

*