Lamprell, Cameron pursue improved rig jacking solutions

Offshore staff

SHARJAH, UAE -- Fabricator Lamprell says its 1H financial results were negatively impacted by the delayed delivery of the jackup Ensco 140.

The company says this was due to the failure of the Cameron jacking equipment, and it is pursuing Cameron for all costs and damages.

During commissioning and testing of the rig, a technical issue was identified. Allthough a solution was put in place, delivery to Ensco ended up behind schedule with Lamprell having to agree a revenue reduction of $25 million.

Lamprell has since worked with Cameron to implement appropriate technical solutions on other rigs under construction.

The focus now is on delivering the next two jackups, the Shelf 122 and Ensco 141, and all six remaining rigs will be delivered over the next eight months.

Despite these problems the company’s Hamriyah yard operations experienced record activity levels during 1H with seven rigs under construction concurrently. This was facilitated by the recent yard optimization and process improvements, allowing Lamprell to accelerate build schedules.

The company also provided cold and warm stacking of jackups at in its facilities, with 10 rigs currently stored. Lamprell has since set up a separate offshore stacking facility that can accommodate 10 rigs without reducing quayside capacity.

Otherwise, the Jebel Ali yard was close to full capacity working for Petrofac, and delivered 33 modules to the client for installation offshore Abu Dhabi. The 12 remaining modules are due to be delivered by the end of the year.

As for future order prospects, there has been a slowdown in the jackup market.  However, the company believes the Middle East will remain its main source of revenue in the near-term future, with high levels of activity and investment likely maintained despite a slow-down in some areas and pricing pressure.

There are also projects to bid for in the North Sea.

Earlier this year the company formed two partnerships in an attempt to diversify. One was an agreement in March to explore joint FPSO opportunities with Dubai Drydocks.

The second alliance was a joint development agreement with Saudi Aramco, Bahri, and Hyundai Heavy Industries for a new major maritime yard in eastern Saudi Arabia. The partners plan to make a final Iivestment decision in the next few months. If this goes ahead, it could have a transformational impact on Lamprell's business prospects.

9/22/2016

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