China's Honghua Secures $25M Rig Supply Contract from Kuwait Drilling Co.

China's land drilling rig manufacturer Honghua Group Ltd. reported Tuesday that it has entered into an ultra-deep drilling rig sales agreement (the Sales Agreement) with Kuwait Drilling Company K.S.C. (KDC), with a total value of approximately $25 million (HKD 194 million). Pursuant to the Sales Agreement, Honghua will provide and deliver one set of ultra-deep drilling rigs to KDC in 2016.

Zhang Mi, chairman of Honghua commented, "This Sales Agreement marks the first domestic made ultra-deep drilling rig to enter into the Kuwait market and breaks the long-term monopoly of the Kuwaiti ultra-deep drilling rigs market by western drilling rigs manufacturers. Since Honghua's entrance into the Kuwait market in 2008, we have maintained a very good relationship with KDC. The continued cooperation not only represents the high market reorganization of our products, but has also shown brand loyalty. We believe that the agreement will benefit Honghua in consolidating and increasing its market share in Kuwait, as well as serving our goal of continuously penetrating into the high-end drilling rigs market in the Middle East, further optimizing our global business layout which will provide a solid foundation for Honghua's wider and deeper cooperation in the future and increase our influence on global markets."

The Chinese firm disclosed earlier Monday that on Dec. 29, 2015, Opus Tiger 1 (UDW drillship) successfully completed the 12-day second sea trial. The trial was focused on the mooring system and drilling system integrated acceptance test. The drilling package designed and manufactured by Honghua successfully passed the test with a satisfactory result.

Opus Tiger 1 is the first intelligent drilling ship which has complete independent intellectual property rights in China. Sea trail area is located at 29 degrees 56'N/123 degrees 53'E, East China Sea, 271 feet (82.5 meters) water depth, lasting for 12 days. Main drilling items were tested successfully as below:

  1. Subsea BOP (blowout preventer) lowering and retrieving integrated test
  2. Trip in/Trip out and pipe handling endurance test (Off-line activity)
  3. VFD (variable frequency drive) harmonic test with Drawworks, mud pumps and top drive

Drilling equipment designed and manufactured by Honghua was proved to be reliable for all functions in the sea trial. The ship owner spoke highly of the successful trial and the "excellent" Honghua-Tiger project team on board.

The "Tiger" drilling package developed by Honghua is the first deepwater floating drilling package designed and manufactured in China. With a drilling depth of 30,000 feet, it has an unparalleled edge in the drillship market with an operating water depth of 3,000-5,000 feet. This drilling package is a middle-to-high end configuration in the offshore engineering equipment manufacturing sector, owns mainstream functions of the international deepwater drilling packages and completely independent intellectual property rights. The "Tiger" drilling package fills up at least 14 technological vacancies in the field in China.

It is the first time that a large number of new technologies independently developed by Honghua had been applied to offshore floating drilling platform, in China. The core equipment of the entire drilling package developed by Honghua has obtained Product Design Acceptance of ABS-CDS.


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