London Offshore Consultants Middle East

Smarter working = potential savings

At the 5th Offshore Jack Up Middle East (OJME) Intl.

Conference & Exhibition, Dubai, U.A.E.
on Tuesday 10th October 2017

Presented by
Cris Partridge MSc FICS
Master Mariner
Managing Director LOC UAE
 Have we trimmed all the fat?
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In an industry where every possible cost has been evaluated, scrutinized and triple
assessed as providing value for money, are there more savings to be had?

OPCOs forced cuts on operators, operators cut salaries, maintenance is carried out on
essential items needed to keep the units operational and capable of earning revenue and
cutting the rates of sub-contactors and service providers.

MWS are at the bottom end of that chain and our rates have plummeted in recent years. In
fact we are now working on lower attendance rates than in the crash of 2008.

However, like everyone else in this brave new world, we have adapted and worked with
our clients to meet the expectations of the long term lower oil price.
 Global day rate indicator for Floaters
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So, the question is have we saved and cut all the fat there is, or is there more we can do?
And if so, from a warranty point of view, how can we do it whilst maintaining safe and effective warranty
compliance.

Data sourced from IUMI 2017 Tokyo as prepared by the IUMI Facts & Figures Committee and as at 31st August 2017
 So can MWS help you save more?
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Essentially there are three main components to any rig move:

1. Review and approval of a new location

2. The move itself.

3. The safe installation of the rig and pre-loading

In each of these components there are a number of sub-tasks:

1a. Review of location data / SSA / LPA / Met Data / Historical data

1b. Preparation of the location approval

2a. Chartering of tugs

2b. Attendance for the rig move

3a. Preloading
 Location Approvals
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Given the large number of MOU location reviews and approvals that take place each year on around the world, which are completed for many
operators by a considerable number of warranty companies, there is an massive amount of available data.

Each MWS, geo-technical company, MOU operator and OPCO retains historical information.

It is not really commercially sensitive so can it be shared between organizations?

Could there be a central database established into which all this data is uploaded?

Is it possible then for subscribers to be given access rights to other subscribers data?

Could non-subscribers be charged a fee for accessing the data?

Advantages:

Ready availability for data for specific rig types at a particular location

Faster evaluation of a rig type for a specific or general area

More cost effective way of providing data to MWS for location

approvals.
 Towing vessels ~ pre-charter
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For significant numbers of MOU moves, towing and anchor handing vessels are chartered in the spot market.
Each vessel spot chartered will undergo several inspections by MWS, the tow-master, possibly the OPCO and in some cases required to be
OVID or IMCA accredited as well.
Could we not consider region specific simplified MWS inspection schemes where the reports are not issued but instead users are advised of
a vessels acceptability or not in a one page format?
To conduct the inspections and ensure standards and industry best practice compliance, these inspections would be undertaken by
companies who are ISO accredited; pre-approved by underwriters; are able to demonstrate a successful track record of similar works and
who can provide proven in-house technical expertise to advise on DP and mechanical issues.

Benefits:
Report writing can cost almost as much as the inspection so there
could be a 30% -50% reduction in vessel inspection costs.
Reports will not be issued after the vessel has sailed (as is
sometimes the case).
Report can still be available but at an additional cost if a stakeholder
wants to pay for it.
The onus is on inspecting Company to become ISO accredited,
provide personnel with the correct expertise and get approved by
underwriters.
 Towing vessels ~ post move
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Once the MOU has reached position the number of towing vessels is often reduced (only the lead tug is normally retained during pre-loading). If
anchors are being deployed such as when working with semi-subs, as the anchor pattern is established and laid the no. of anchor handlers on
site can be gradually reduced.
Even if the vessels are permanently on-hire to a company there maybe internal allocations, so getting them back to port quickly and efficiently
makes sense.
Considering the daily cost of vessels, fuel burn and cost and whether or not vessels can be worked on arrival or not.
There may be times when sending a vessel back at full speed or releasing it early makes sense. Releasing early in the UK can make real sense
for a deep draft vessel that if released early could make a tide at Aberdeen as opposed to being on hire for another 6 hours or so.
At a local level, timing the release of vessels to effectively complete inbound clearances at Abu Dhabi with minimal delay before the vessel can
be returned to Owners at Sharjah need to be considered.

Who currently makes this call offshore at the end of the move everyone is
often tired and not thinking about which vessel should be released and when,
and if there is a working gang ready when the vessel comes alongside.

Benefits
Saving just one half day of vessel charter rates for one or two vessels on
each move, over one year could lead to large potential savings
 Reduced pre-loading
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On a LT Super 116 E jack-up, if one follows the operating manual to the letter with each leg being pre-loaded individually, a 100% pre-load
operation takes around 22 hours.

Depending on the variable load onboard, it may be that the sterns legs can be pre-loaded together and the required leg reactions are achieved.
Even then pre-loading will be a 14 to 16 hour event.

In many parts of the world where deep penetrations may be common place there is clearly a requirement to ensure full pre-loads are completed.
This is also true on virgin sites. However, offshore Abu Dhabi, rigs are placed on oft visited locations with firm sea beds where little penetration may
be expected or achieved. The water depths, across large swaths of the major oilfields, are relatively shallow. Weather conditions are generally
relatively benign.

Why do we in 99% of cases still perform a full pre-load?

We see that most LPAs generated for sites in OPCO concessions offshore Abu Dhabi, automatically use maximum pre-load values. If the LPA
shows a safe location with a flat line from low leg reactions up to and past the maximum pre-load leg reaction it would not be unreasonable to
consider that there is no real requirement to complete 100% pre-loads.

Benefits

Less time on preloading means more working time. The ability to get the rig
skidded out and ready to drill quicker means greater efficiency for the OPCO and
the MOU operator.

A few hours saved on each rig move could equate to several more days drilling
time over a year. At 100K USD or more per day, just 5 days is a half million dollar
saving.

There is also an advantage with the reduced running

hours of pumps thus extending the maintenance /
overhaul intervals.
 Mobile unit losses IUMI Data 2017
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From an annualized rate of 3.5% during 2009-11, claims frequency has fallen to 2.8% between 2012-15.

The average size of claims below $100m have increased from US$7.3m per annum during 2002-04 to US12.0m during 2012-15. This
is a 5% rise per annum.

There have been 20 losses above $100m since 2009 as against just 5 losses between 2001-08.

Note: Figures exclude hurricane losses and are based on Willis Loss data to 31st January 2017.

Data sourced from IUMI 2017 Tokyo as prepared by the IUMI Facts & Figures Committee and as at 31 st August 2017
 Its time for me to leave!
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Thank you for your kind attention.