BLOG: WHAT’S FEEDING THE SUBSEA RENTAL MARKET?

: By Billy Pierce and David Nemetz, JDR Cable Systems

The long-term effects of the prolonged trough in oil prices are yet to be established. However, certain trends have emerged as a response to the changed financial climate. One trend is a growing interest in rentals for key equipment from long-established OEMs. Of course, interest in the rental market is not new. But more operators are exploring rental options in preference to outright purchase of, for example, new IWOC systems.

And, it’s not just the pain of price pressures. It’s also the post-Macondo environment, which has led to an increased emphasis on API standards and their dissemination worldwide. In particular, the much-discussed API 17G is set to provide some very targeted guidance on how subsea well intervention and subsea well control systems are to be supplied. The shift to a rental model allows OEM companies to focus on these critical changes.

These are the general arguments that have fed the growth in the global rental-and-services market. However, when it comes to intervention and workovers space, and the rental demand for IWOCS and related equipment, perhaps the most compelling argument is that of timing. As today’s market is focused on maximizing production or even restarting difficult wells, demand is not forecast as far in advance as it would be in the traditional completions space. With insufficient time to spec, manufacture, deliver and deploy a whole new umbilical system that can be quickly reconfigured and delivered is the answer.

Technology and design

However, for the rentals market to really deliver on its promise, there are two key factors that must be considered. The first is the technology and the second is the quality of the people delivering it.

There are certain design features that are determined by circumstance, which limit their suitability for multi-region deployment. The length of an umbilical will be determined by water depth. Equally, available vessel size and restrictions on reelers are key factors of umbilical and IWOCS design. It would be foolish to suggest that a vessel and attendant equipment intended for the 10,000 ft. depths of the Mexican Gulf could be sent to Malaysia for 2,000 ft. waters.

Rather than looking at multi-region system designs to meet these demands, OEMs are looking at component designs and establishing which can be standardized for all geographies and operating conditions.

For example, an umbilical termination assembly (UTA) based on a modular design can be run either with a mud mat so it can deploy a pendulum, or without one. That modular UTA can therefore be run anywhere in the world with various different deployment styles and allows quick and easy reconfiguration for new well or tree types. Similarly, as-built hydraulic schematics can be tailored or reconfigured before being dispatched to site: in this case, the reconfiguration is dependent on the specific hydraulic and electrical circuits running a given piece of equipment. Finding these and other commonalities helps OEMs re-deploy their rental fleet in numerous regions.

Skills and the rental future

The second factor is the nature of the company providing the equipment. Consider the example of the hydraulic schematics. Consisting primarily of standardized components and design, they still require some configuring in the manufacturing plant to meet the precise user requirements. To meet tight deadlines and avoid costly errors, the rental supplier must have exceptional engineering talent available to carry out the necessary specifications – not to mention the experience that comes from deploying intervention and workover systems in multiple environments.

For years operators have relied on global manufacturers to provide top-quality, robust, hard-to-break equipment. As they get used to leasing the same top-quality, robust equipment without any compromise to the integrity of their wells, or any loss of service some of those operators may become permanent converts to the benefits of rental.