Jackup package includes ‘world’s largest mud system’
Drilling equipment supplier Sense EDM became part of TTS Marine in May following an agreed $89 per share purchase. TTS described the acquisition as a “major step forward in [TTS’] targeting of a third business area - drilling and offshore equipment - in addition to ship’s equipment and port equipment...”
TTS already serves the offshore market, principally as a one-stop shop for the supply of advanced handling equipment, including offshore cranes to platform supply vessels. Acquiring Sense EDM allowed it to expand into the equipment market for fixed and floating installations.
In June, Sense EDM made a breakthrough by landing its first contract for a complete drilling equipment package. The customer for the delivery is Jurong Shipyard of Singapore. At the time of the announcement, the rig and its owner could not be named as the shipyard had yet to sign the construction contract, but it is known to be an advanced jackup which will be built to the CJ70 design.
Sense EDM delivers land rigs based on offshore technology. Pictured is an X-Racker pipe- handling system forming part of one of the company’s deliveries.
Sense EDM’s contract, worth around $65.27 million, is the “world’s largest jackup drilling equipment package,” according to chief technical officer Erik Zachariasen. It includes the derrick with all equipment inside, drawworks, top drive system, pipe-handling system, drillers’ cabin and control systems, and the world’s largest mud system. Delivery of the mud system is the responsibility of Sense Mud, a Sense EDM subsidiary established in 2006.
Top-of-the-range equipment and controls are essential, Zavahariasen adds, as the rig has been designed to fulfill Norwegian sector requirements, which should enable it to operate anywhere in the world.
Far East strength
Sense EDM’s efforts over the past several years to establish itself as a reliable drilling equipment supplier now are bearing fruit, Zachariasen says. In the past, it has delivered partial packages to Jurong through other vendors and has made sales to PPL, another Singapore yard, as well as other Far East yards. It faces fierce competition from the two leading players in the sector, Aker Kværner MH and National Oilwell, but in his view, customers prefer a diversified supply sector.
The company has a strong order-book, currently worth more than $169.54 million. The delivery of current orders will continue through to 2010. In addition to its 200 employees, mostly engineers or staff directly involved in handling deliveries, it is in the process of taking on 50 new recruits, the first 17 of which were signed up during June.
Sense EDM’s strength is in designing equipment and systems. Most manufacturing is done by regular sub-suppliers, and the company assembles the complete systems.
Its headquarters in Norway are in Kristiansand, with further facilities in Stavanger - the company was created following the merger a few years ago between Sense Technology of Kristiansand and EDM of Stavanger. It is opening offices in Singapore and Houston to add to its existing office in Calgary, assembly and after-sales facilities in Edmonton, and representation in Australia.
The company’s business idea that onshore drilling has a lot to gain from offshore technology also is finding resonance in the market. It currently is working on orders for eight land rigs, having already delivered 10.
“When we turned our attention to onshore drilling technology, we were starting from square one, so we were able to think out of the box,” says Zachariasen. A lot of established suppliers rely on volume and devote few resources to engineering, so in recent years onshore equipment has undergone limited development, while at the same time the design of offshore drilling equipment has progressed dynamically.
Hence the design of the company’s land rigs is unconventional - they are put together differently, the hoisting system is a patented rack-and-pinion drive, pipe-handling is fully automated, AC powered, there is a smart mud system, and the drillers run the show from a sophisticated operator’s chair using an integrated control system. It all adds up to what Zachariasen calls “the next generation of land rig.”
“It’s a combination of features and functionality drawn from offshore technology,” he says. “This equipment enables operators to do operations more efficiently and to do more operations, such as under- and over-balanced drilling. Conventional onshore equipment is low on technology and therefore low on price, but if you start thinking our way from the start of the design process, you can produce a competitive product.”
Four of the company’s land rigs are fully integrated in e-field systems, an indication of how onshore operators are appreciating the benefits of integrated operations, which also originated in an offshore context.
