Singapore: Dynamic Drilling Holdco is all set to move beyond Indian waters as it expands its fleet of jack-ups. Founded three years ago, Dynamic Group has three jack-ups and a drillship on charter to India’s Oil and Natural Gas Corporation (ONGC). On top of that, there’s a rig plus three options on order at Cosco Dalian Shipyard in northern China. The options are likely to be declared soon, says Manav Kumar, a director at Dynamic, and all the orders may well go on charter to parties beyond India.
Dynamic was founded, says Kumar, because it was clear that oil companies needed quality rigs and drilling services with oil prices remaining comfortably high. It’s joint venture partners include Singapore’s Keppel and Seacor from the US. Management takes place out of Singapore, where rigs are also flagged.
Dynamic is not alone in clocking that perceived rig shortage and a vast amount of orders have flooded the sector, something Kumar acknowledges, but without too much concern.
“A short term drop in rates is likely next year,” he says, “as a lot of newbuilds come onstream, but the long term forecast remains good for serious drilling contractors.”
The quality of assets that are coming out is a “concern”, argues Kumar. Dynamic’s rig heritage stretches back to 1980s, but in the last four years there have been a vast number of new entrants into the offshore sector, not least from the depressed shipping side. “There are too many new owners and yards,” Kumar says, warning: “This industry is very technology and process centred, assets have to built to the highest quality with proven equipment and experienced shipyards.”
Having said that, Kumar is happy enough with his chosen yard, Cosco Dalian in China, a nation that last year surpassed Singapore in the amount of rig construction contracts sealed.
Speaking recently at a breakfast organised in Singapore by Maritime CEO parent Asia Shipping Media and Standard Chartered Bank, Kumar observed owners must be diligent when building in the People’s Republic. Quality, timing and price are attractive in China, although he recommended to build in very selective yards with strong quality supervision and to add in an extra couple of months for any construction project to iron out certain building wrinkles.
As well as the options to be exercised, Kumar tells Maritime CEO the company, which includes this title’s newest columnist, Dagfinn Lunde among its board of directors, that other drilling investments are being eyed. [03/04/14]