PRC is recognized as one of the largest international conductors of the oilrigs construction projects. According to the data from the Offshore Projects report, the Chinese shipyards planned to provide more than 50% of the offshore oilrigs for sale over the globe. The shipyards in China won the contracts for the oil platforms construction, which would become possible thanks to the generous financing, the down payments of which were just 5%. At the same time, the cost of a big jack-up might total up to $230 million.
The today’s situation with the prices on oil has turned to be significant for the shipyards in China. It is connected with the fact that many of their customers have faced certain problems, which is pointed in the report made by the Wikborg Rein firm (the Norwegian law company).
According to the Global Offshore Projects report, the great lowering of the prices on oil started in the middle of 2014. This situation provoked the critical cut of the demand for the oilrigs, which were created by the Chinese shipyards and transported by their heavy-lift ships to various oil fields all over the globe. Thus, there were several rigs left unfinished or undelivered. The problem cash-strapped the customers as they had expected the constant growth of the oil prices.
How to build an oilrig: the measures taken by the Chinese shipyards
Facing plenty of problems with the demand for the oilrigs, Chinese shipyards have several variants of action:
- the joint venture offers (the joint operation of the rig together with the yard): such option might help return at least the construction costs of the rigs and can be continued to lower the expenses
- the lease of the rigs (the solution also offers the opportunity to purchase the leased rig in the future).
There is another way of reaction. To deal with the problem, the selling of the oilrigs at a discount (especially the unused ones) is possible. However, as the Global Offshore Projects report says, the Chinese shipyards are not planning to follow such strategy. There are no signs that even the shipyards in China, which have been strongly affected by the cancellation of the rigs, are willing to use a discount option and sell the rigs below the prices agreed in the contract to scramble the cut of the demand.
The information in the Global Offshore Projects report illustrated the plans of the Chinese shipyards to deliver up to 60% of the rigs to the oil fields located worldwide by 2015-2016.
The situation with the future of the Chinese shipyards is still not that clear. The arrangements and joint ventures can help keep heavy-lift ships busy hauling oilrig’s modules, which have been produced in China. As the Global Offshore Projects report says, the created solutions are quite innovative and might really help the yards face and overcome the current problems. It is difficult to make any conclusions by now, nevertheless, the Chinese shipyards have done everything they could to support their clients all over the world and continue building and delivering the oil rigs despite the decrease of the prices.