Samsung Heavy Industries has got the upper hand in the global drillship market since its winning Korea’s first drillship building contract in October 1996 to construct a vessel for developing ocean oil wells
Petroleum and natural gas are two of the most convenient and high-quality energy sources currently available. Lately, the subsea production of the two is increasing, unlike its on-land counterpart. With the advancement of offshore oil drilling technologies, more and more oilfields located in and around deep-sea areas some 2,000m underwater, low-temperature regions like Sakhalin and the North Pole, and earthquake-prone zones are under development these days.
The drillships of Samsung Heavy Industries are also an outcome of this worldwide trend. A drillship can be defined as a type of marine equipment for deep-sea drilling, costing US$500 million to US$600 million on average and up to US$1 billion per vessel.
Samsung Heavy Industries won Korea’s first drillship building contract in October 1996 when it was selected by the consortium of Conoco of Dupont Group and R&B, a global oil field developer, to construct a vessel for developing ocean oil wells. Until then, the Korean shipbuilding industry was mainly focused on ordinary merchant ships, e.g., oil tankers, container ships and bulk carriers, with a drillship considered quite a technological challenge for it.
However, the company successfully built the vessel and began to get the upper hand in the global drillship market. It snatched another similar deal in February 1997 and went on to win 7 out of the 12 contracts awarded worldwide until September 1998. It took just two years for the newcomer to take the lion’s share of the global market.
Between 2000 and July 2005, the number of drillship orders placed recorded zero. However, the market began to rebound in August 2005. Since then, the heavy industries giant has obtained a total of 39 out of the 72 contracts, reaching a global market share of 54%. Back in 2008, it won a deal to build a one trillion won-worth drillship, the most expensive in the history of the industry.
Experts are saying that this feat can be attributed to Samsung’s nimble-footedness in learning the needs of major oil companies, i.e., oil rigs with mobility and performance significantly better that those of offshore platforms semi-submersible faculties in general. Samsung, well aware of such demands, has been committed to meeting the needs by means of industrious R&D.
More recently, Samsung has been further refining and improving its drillship building technology with an increasing number of deep-sea and polar oil fields tapped. In particular, Samsung's polar drillships were the first to adopt an ice-resistant design. The purpose is to allow such ships to be in stable operation in the Arctic Ocean region, home to a number of ice masses. The average thickness of the hulls is four centimeters, and the equipment goes through heat-retaining treatment so that the ships are not vulnerable to temperatures as low as 40 degrees C below zero. At the same time, not only do its vessels boast the world’s fastest drilling speed, they satisfy strict environmental criteria and operation regulations of e nations in the North Sea region, something unprecedented.
Compared with the floating production, storage and offloading (FPSO), LNG-FPSO is a relatively newer concept. An LNG-FPSO unit is used to produce, liquefy and store natural gas at sea. The first LNG-FPSO unit was developed in 2008 by none other than Samsung Heavy Industries. Up until now, six LNG-FPSO vessels have been built or are scheduled to be built globally, with Samsung monopolizing the market.
In the past, natural gas in underwater gas fields used to be pipelined to on-land liquefaction and storage facilities before being transported by LNG ships. However, the LNG-FPSO vessels Samsung developed can conduct these functions at sea, removing the need to construct relevant equipment on the ground, and which costs approximately two trillion won on average. Furthermore, the commercial operation of mid and small-sized offshore gas fields can be significantly facilitated with the LNG-FPSOs.
In July 2009, Samsung Heavy Industries concluded an LNG-FPSO supply contract, effective for 15 years, with Royal Dutch Shell. The contract for the first unit the deal covers was signed in March 2010, with the price of the ship totaling to no less than US$3,026 million.