Lamprell Steady Despite Softening Oil Market Outlook
The portents of an oil market in retreat complicate life for upstream players looking three to five years out to run their business. From today’s vantage point, talk of an $80 floor on oil prices did not seem possible six months ago.
Just when Lamprell plc of the United Arab Emirates thought it had sorted out management issues through the astute leadership of Jim Moffat, appointed CEO in March 2013, a new problem emerged: softening global oil prices. With Brent and WTI testing new multi-month floors, all eyes are on forthcoming OPEC meetings in Vienna.
Although rig intensification has been a boon to global service providers like Lamprell, the largest jackup manufacturer in the Middle East with a 60-percent market share as of last December, all omens show that the cycle is entering a decided dip.
A diversified engineering and contracting concern for the oil and gas and renewable energy industries, Lamprell operates yards at Hamriyah, Sharjah, Jebel Ali and Jubail Industrial City in Saudi Arabia. It also has land-rig service shops at Hamriyah and Dubai Investment Park. These facilities total 9,150,000 square feet (850,000 square meters) in fabrication space and other workshops.
Lamprell has clients as diverse as the UK’s Ensco, National Drilling Company of Abu Dhabi and Greatship Global Energy Service of Singapore, and its remit lies well beyond the region.
Nevertheless, the Persian Gulf (and Red Sea) is the world's second-largest largest market for jackup rigs after Europe, according to Rigzone’s RigLogix database, with a total of 104 rigs contracted (out of a fleet of 139). The Red Sea has only 12 rigs contracted, (fleet size 18).
Dubai's Drydocks World and Maritime World are among those snapping at Lamprell's heels. Khamis Buamim, chairman of Dubai's Drydocks World and Maritime World told Rigzone Oct. 12 that the company was preparing to start work on two new jackups in the near future.
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