Fresh lease on life for region’s yards

UAE’s QGM Group is the pride of the pack after bagging the region’s first jack-up rig contract

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By  O&GME Staff Published  March 2, 2006

For the first time in 20 years, a Middle Eastern company has won the contract for the construction of a jack-up rig. QGM Group, based in the Hamriya free zone, Sharjah, has won the order from the Norwegian company, Thule Drilling, for two jack-up rigs. The contracts, with a combined value of AED 925 million, may just herald a new era for Middle East yards, believes Tony Bromham, QGM partner and technical director. Bromham also says that the order reflects the confidence international companies are beginning to have in things built in the Middle East. “All these years, yards and docks in the region were more focussed on ship repairs and refurbishments; even with respect to rigs we were always involved in modifications and not in building one from scratch. But now the high oil prices have meant very long waiting periods for rigs, and rig hire companies are confident enough after nearly 20 years to go ahead and build a new one,” he says. Rig building has traditionally taken place in Singapore. Bromham says that the new major docks in Singapore have their order books full, and the next obvious destination for rigs is the Middle East, particularly the UAE. “Singapore has perfected the art of rigs, and also the government there offered subsidies at the right time for the operators to enter the market. But now they have their hands full, and the European service companies do not want long waiting periods, so they are allocating some work to the Middle East.” Bromham also says sending work to the European yards is not even considered by the rig companies, as the costs are just not manageable. Overhead costs and money to man are factors that will make Middle East yards an attractive proposition, he says. The rigs that are currently built in QGM’s yards will be marketed in the Middle East region. In the UAE, three rig operators, Dubai Drydocks, Lamprell and Maritime Industrial Services, service, maintain and upgrade up to 20 rigs per year. In terms of the major challenges that the company faces when trusted with such a mammoth project, Bromham said it is monitoring third party failures. “I can control everything within my reach, but third party supplier failure is probably one thing I dread,” he said. “To give you an example, last week, one of our cargo ships was offloaded because a US military ship boarded ours with its military equipment for whatever reason, so I had to either be prepared for my cargo to reach me two weeks later than expected or hire a new cargo ship to get my supplies. That should tell you something about the problems I have in mind,” concluded Bromham.

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