EDITORIAL COMMENT
Offshore conversion contracts prove welcome news
More FSO and FPSO conversion contracts are on the way.
T
he rising cost of oil may be hurting drivers across the world when they fill up with
petrol, but the trend may be welcome news for shiprepair and conversion yards. In recent weeks there have been clear signs that investment in shipping from the oil and gas sector is picking up again as a direct link to higher oil prices and in this issue we carry news of a number of new offshore conver- sion and upgrade projects to have been won by yards worldwide, in recent weeks from Singapore to Cornwall. Many of these projects are intended for new exploration work and there are also a number of FSO and FPSO deals that have been done. A significant number of further offshore ‘floater’ conversions are reported to be under discussion with oil majors, especially in Brazil and West Africa, with more contracts expected to be awarded before the end of the year. As a ref lection of the brighter
outlook, Dubai’s Drydocks World has recently announced the establish- ment of Drydocks World - Offshore as a new entity within the group. This is a marketing arm specifically set up to sell the significant offshore capabili- ties of the company, which will move towards offering complete Engineer- ing, Procurement and Construction (EPC) solutions to clients, as well as continuing its core business of ship repair. The Dubai yard has already been extended with 670m of dedicated
conversion quayside supported with travelling cranes and fabrication areas. In addition a new state of the art pipe fabrication facility will be commis- sioned mid-year. Drydocks World
“A significant number of FSO and FPSO conversions are reported to be under discussion... more contracts are expected to be awarded before the end of the year.”
says it aims to significantly increase its share of the offshore market in respect of repair, refurbishment, conversion and rig building. The offshore business pick-up
is welcome for yards at this difficult time. In other sectors owners are cutt ing back their spending on maintenance and repair to the bare minimum. Moreover there are moves to extend the standard period between dockings from five to seven years for
Shiprepair and Conversion Technology 2nd Quarter 2010
many categories of vessel, a develop- ment which will inevitably lessen the workloads of many repair yards. Careful consideration will have to be given to the wisdom of such a move, however. While the logic appears sound, that modern technology allows a seven year gap, an accident involving a vessel whose drydocking schedule had been extended might be a PR disaster for the industry, and the company concerned. Putting profit before safety would inevitably be the media angle on such an event. There are signs that repair yards are
facing some tough times. As this issue went to press there were unconfirmed reports that the Barcelona yard, UNB, was going to close down, leaving a gap in the Mediterranean market at a time when Malta Drydocks is still not operational under its new owners Palumbo group of Italy. The Marseille drydock is also non-operational at this point in time. There will probably be casualties,
as the market cannot sustain all the existing repair yards, together with newcomers such as those opening soon in Oman and Qatar, as well as the many newbuilding yards which are looking to diversify into repair. There is a general agreement though that 2011 will be much better for the repair and conversion sector, as work cannot be postponed for ever, and so perhaps there is light at the end of the tunnel for those who can reach it. SCRT
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