Stena Drilling

FOCUS ON SAFETY ROUND THE CLOCK, ALL YEAR ROUND

Stena Drilling is one of the world’s leading independent drilling operators. The company operates globally from its head office in Aberdeen, Scotland, with four drillships for ultradeep water and three semi-submersible drilling rigs. With several successful new newbuildings and refurbishment projects, Stena Drilling has been a pioneer in several areas of technological development and innovation in the offshore industry.

Stena Spey is a semi-submersible drilling rig, built in 1983 at the Daewoo shipyard in South Korea. The drilling rig is contracted until the end of 2016.

In South Korea, work is progressing on the drilling rig that Stena Drilling ordered in 2013. The contract signed with Samsung Heavy Industries covered two semi-submersible rigs, with an option to cancel one unit. The option has been extended and means that Stena Drilling can make a decision in the spring of 2015.

Stena Clyde was employed on several short contracts during the year, the last with CAL Energy, expired towards the end of 2014. At the end of 2014, the drilling rig was at a shipyard in Singapore for its SPS. This is a mandatory inspection every five years to ensure that high safety standards are met. During an SPS, the unit’s propellers and drilling equipment are removed and maintenance work is carried out on them, while the hull is also examined.

During the coming year, Stena Forth will go into dock for an SPS lasting 60 days starting in May 2015. Stena Don will undergo an SPS later in 2015.

The contracts for Stena Spey, Stena DrillMAX and Stena IceMAX are continuing. Stena Drilling had a longer contract with Statoil for Stena Carron, which lasted until the third quarter of 2017. Statoil decided to cancel this contract in 2014 and pay a cancellation fee. Stena Drilling believes that there are good opportunities to sign a new, favourable contract for the drillship.

Rigorous safety work is carried out on a daily basis on board Stena Drilling’s units. In 2014, the company was pleased to report twelve consecutive months without a single lost-time incident.

Safety in focus

Stena Drilling has had a very successful year, particularly from a safety perspective. In October 2014, the company was pleased to announce that Stena Drilling’s seven units had completed twelve consecutive months without any lost-time incidents.

The reason for this successful result is Stena Drilling’s far-reaching and tangible safety work. Safety is not the responsibility of a separate department, but is an integral part of the line organisation’s operational responsibility. Management of the drilling units plan and conduct the day-to-day work, and ensure that safety is given the highest possible ­priority. Any deviations from normal are documented and ­evaluated at safety audits seven days per week.

Personnel

Through its operations, Stena Drilling employs about a thousand people on the seven units. The challenge lies in recruiting the right people to work on board. As employees spend a month at sea, they need to have the understanding and the right attitude to be away from their family for a long period. Since 2007, Stena Drilling has had a low employee turnover of 6% per year. Almost 50% of people who leave the company return. This is largely because employees see themselves as part of the company, in that they are given responsibility and authority to participate in the business.

Future development of the industry

For a number of years, international oil companies have invested large amounts in the business. This trend has slowed, while unrest in the Middle East and uncertainty in Russia have led to reduced activity in these areas. In Brazil, the petroleum industry continues to be very important for the region.

The contracts that Stena Drilling has remain positive. The company has a good reputation and a very high utilisation rate for its units, which reached 98% in 2014. With our best in class operation, we guarantee a high level of customer ­satisfaction and the company is therefore well equipped to respond quickly to a changing market.

A Day In The Life Of Stena Drilling

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FLEET UTILISATION

Operational use as a percentage of total available days.

DRILLING CONTRACTS1)

Unit Customer Expiration2)
Stena Clyde SPS Q3 2015
Stena Don Statoil Q4 2017
Stena Spey Enquest Q3 2016
Stena DrillMAX Tullow Q3 2018
Stena Carron Warm Stacked N/A
Stena Forth Hess Q2 2018
Stena IceMAX Shell Q2 2017

1) As of 31 December 2014
2) Including options

CEO comments

2015 will be a special year, with reduced investments in many markets. Our customers are very happy with what we deliver, which gives us a good position despite the slump in oil prices at the end of 2014.

The next few years will be marked by considerable uncertainty about macroeconomic factors. Some of this is associated with the US presidential election in 2016, which may affect international demand for oil.

Tom Welo

CEO, Stena Drilling

Next in Annual Review 2014

STENA BULK

EXPANSION PLANS AND A GROWING FLEET