Fleet Size, Capabilities the Difference for New CompanyTue, 01/21/2020 - 16:51
Q: How did Ensco and Rowan use the downturn to position Valaris for a stronger future?
AQ: There was an overbuilding of rigs in 2014 that led to a challenging four or five years in the offshore drilling industry. Both legacy companies used this downturn to implement cost-control measures and improve operational efficiency. Similarly, both companies focused heavily on technology; dramatically enhancing their understanding of each other’s performance. Data streaming from our rigs has helped generate these insights and we have been able to take steps toward systematic and permanent improvements. We are well-positioned for the next upcycle. JP: The merger decision was taken to secure the future of both legacy companies. As Valaris, we now have the most diversified fleet in the market, giving us more possibilities to win a wider range of contracts than both companies alone. We are now the world’s largest offshore drilling contractor. This was a central driver in the decision to merge and, due to added competitiveness, we expect to see more mergers take place in the industry in the near future.
Q: Where has Valaris located opportunities globally and in Mexico?
AQ: Our priorities are in Norway and in Latin America, including Mexico. We are excited by the international companies coming to explore Mexico’s ultra-deepwaters and we have shown our commitment to the country by bringing a rig over for a short-term project. We brought the Valaris Renaissance to the Gulf of Mexico to work for Total and recorded the deepest water-depth ever reached in that area. We have also signed with Petronas in Mexico and are exploring other available opportunities.
Q: What makes Valaris’ rigs ideal for working in Mexico’s ultra-deepwaters?
AQ: Valaris is a recent entrant to ultra-deepwater drilling and our deepwater assets are equipped with state-of-theart technology. Our rigs have 12,000ft true water depth capabilities, DP3, two BOPs, dual activity, an active heavy crane for subsea operations and a riser on the hull. These are features that our competitors simply do not have. Additionally, we have very highly skilled and competent personnel with significant ultra-deepwater experience.
JP: Valaris has a combined fleet of 16 drillships operating in the ultra-deepwater market. The company also has semisubmersibles that can be sent into ultra-deepwaters. Of the company’s 28 floaters, 25 are fitted for ultradeepwaters; highlighting the fact that these are all relatively young.
Q: How does Valaris ensure high health and safety standards?
AQ: Valaris uses the Perfect Day concept to make our health and safety goals practical and attainable. While total recordable incident rates and similar metrics are useful at an upper management level, these terms add little value to the crew at the rig. The Perfect Day concept is based on clear risk-reduction variables and makes our safety goals more concrete.
JP: We have high-end training centers that use simulators for well control training exercises that guarantee our staff is trained to a far higher standard than the minimum level required. A safe rig is an efficient rig and we want to make sure employees go home in the same condition they came in.
Q: What are Valaris’ policies regarding local content?
AQ: Valaris has a company-wide mandate to hire people from whichever country it is working in. This is not always an immediate possibility because we have to train our staff, but our intention is always to hire locally. Currently, as a drilling contractor, we do not have any local content requirements in Mexico, however knowing the high skill level of locals, over 25 percent of our crew members in Mexico operations are locals to other countries where we have opportunities to bring in new ideas and experience to our management teams around the world.
JP: As a respectable international drilling contractor, we recognize our social obligation to source local content. Beyond this, however, local content strategies make us a more efficient company. Valaris’ merger opened synergy opportunities for local content across the two companies, especially in terms of labor as there is an abundance of qualified workers to work on rigs.
Q: How does Valaris’ roll out decision-making when working internationally?
AQ: Many IOCs work in a similar way. Early exploration plans take place at the company’s hub, which is often in Houston. As plans progress and procurements are made, staff moves to the country of operation. Early exploration activities usually happen at a temporary base in the country of operation and, if discoveries are made, the company begins to establish a more permanent base. Decision-making power then shifts from headquarters to local executives.
Q: What is your outlook regarding day rates in Mexico and what differentiated value do you offer clients?
AQ: Day rates have hit a low and will soon begin to rise again, which is reflected in recent contracts. Our customers are also realizing that day rates will be higher in the future. But Valaris has the ability to compete in other areas besides price. There are few rigs in the world that can reach true water depth of 12,000ft. Another advantage is that we have infrastructure in place to read real-time data from the rig. This allows us to add a pay-per-performance dimension to our contracts for both Valaris and the client’s benefit, while associated costs are reduced. Good performance is measured through KPIs, including tripping speed, safety and environmental components, all of which are controlled by the drilling contractor.
Q: What are Valaris’ priorities for the future?
AQ: Our future is focused on developing our own technology and intellectual property. This is how we predict drilling contractors will differentiate its services in the future. Big Data, machine learning and artificial intelligence are all beginning to influence our sector with many contractors using these technologies for predictive maintenance. The company believes machinery automation at the rig floor combined with real-time measurements to automate drilling decisions will play an important role in remote operations. We are striving for a safer working environment for our workers and streamlined efficiency.
Valaris was formed following the merger of Ensco and Rowan in April 2019. It is now the world’s largest offshore drilling contractor, bringing decades of experience to operators in waters around the globe.