Balmoral Group Awarded Two Deepwater Contracts

Balmoral Group announced two international deepwater contracts, valued in excess of US $20 million, that will boost the company's global production workforce by 25%. The company secured a multi-million pound Gulf of Mexico deal for its new "UltraFloat" drilling riser buoyancy system and is about to begin production on thermal insulation/buoyancy modules for Phase II of the giant Girassol project offshore West Africa.

Speaking in Aberdeen, chairman and MD of Balmoral, Jim Milne said: "I am pleased to announce these contracts at a time when the manufacturing sector is experiencing a downturn. I'm also glad to report that Balmoral is bucking the trend by employing staff rather than laying people off. These projects are significant for us in many ways. The Santa Fe contract represents the first major order for our new UltraFloat buoyancy system and to secure the Girassol Phase II sealine bundle requirements is terrific news for the company. These contracts will not only sustain current levels of employment at Balmoral but will see us increase our production workforce from 250 to 325 people over the next three months."

Santa Fe placed this year's largest drilling riser buoyancy order with Balmoral for two complete sets of 7500ft riser strings with options for future requirements. The buoyancy modules will be used on Santa Fe's new semisubmersible rigs, "184" and "185" in the Gulf of Mexico and will propel the company into the ultra-deepwater drilling arena. Vice president and manager of purchasing at Sphere Supply Inc, Harry Swanston, commented: "After careful technical and commercial evaluation, we determined that Balmoral offered the best overall value for riser buoyancy to meet our requirements".

The order will be manufactured at Balmoral's Houston facility, doubling the production workforce, and will be supported by the company's technical and engineering teams in Aberdeen. UltraFloat is one of many new thermal insulation/buoyancy systems developed by Balmoral in the North-east and has led to the company securing the lion’s share of riser buoyancy contracts from the global energy sector in recent years. Designed to address the challenges of safety, impact and flexure damage, "UltraFloat represents the safest and most highly engineered buoyancy modules ever available to the drilling industry", continued Mr. Milne. "Serious injuries have occurred through buoyancy modules breaking up during deployment – thankfully this has never happened with a Balmoral product, but, nevertheless, it is an issue that had to be dealt with. Balmoral is the only company to manufacture buoyancy modules with integral safety reinforcements which prevent the modules from breaking up even after complete fracture. Quite an achievement and I congratulate our technical team on its efforts." The order is seen as the fruits of an ongoing commitment to research and development at the company. Heading up the R&D and technical team at Balmoral is group technical director, Dr Robert Oram: "We have invested heavily, both in terms of finance and man-hours, to bring UltraFloat to the market. This product shows dramatic safety and performance improvements over 'standard' modules and I am optimistic that the drilling industry will welcome it with open arms. I would urge operators and contractors to see for themselves how much of a difference can be realized on the drillfloor by using UltraFloat."

Two years ago, at Offshore Europe 1999, Balmoral announced that it had secured the industry's largest ever thermal insulation/buoyancy order for the Girassol field. Today it announced that it has secured work for Phase II of that project. Phase I required Balmoral to supply insulation/buoyancy for Girassol's three riser towers and sealine bundles and, with these products designed to work at depths of 1350m, proved to be a challenge which the company's technical team overcame. This was the first time that modules had been built to such critical dimensions while adhering to very tight tolerances. The company successfully completed the contract and all three towers and bundles were installed 210km offshore Angola earlier this year. Following the award to produce sealine bundle modules for Girassol Phase II, Balmoral's Aberdeen plant is about to begin production and is currently recruiting manufacturing personnel to see the contract through. "Laid end to end, the modules produced by Balmoral, for Girassol, would stretch from Aberdeen to Edinburgh. This project proves, if proof was needed, that the North-east of Scotland retains its critical position as a center of pioneering technology for the global oil and gas industry," continued Mr Milne. "It is encouraging for all those associated with the North Sea to see profitability rising as we have had a pretty tough time of it recently. I am pleased to see the operating companies reaping the rewards for sticking by their investment in the UKCS and, naturally, I am keen to see them introduce renewed capital expenditure to the region, not only for their North Sea operations but also for their global projects. With the award of the Santa Fe and Girassol contracts, and with many more projects being bid, I am confident that Balmoral will continue to be the dominant player in the worldwide thermal insulation/buoyancy market."