RIGS AND EMPLOYEES
WILL BE READY WHEN
THE MARKET TURNS
The pandemic affected the offshore industry severely, causing many energy companies to defer long term investments, such as offshore prospecting. Stena Drilling decided to maintain the rigs that had lost their contracts in top condition and to have as many employees as possible ready in a standby group. As a consequence, all units have contracts for much of 2021.
Stena Drilling is one of the world’s leading independent drilling
contractors. The company is also a pioneer within several areas of technical development and innovation in the offshore industry, after several successful newbuilding and conversion projects. Today, the fleet comprises four drillships and two rigs, operating in a global market.
The global downturn for oil- and gas-related companies began in 2014, with the consequence that energy companies scaled down their investments, first of all for costly offshore drilling projects. Many sector participants maintained an optimistic outlook for the offshore market at the start of 2020.
“This also applied to Stena Drilling. At the start of the year, we held full-year contracts for much of our fleet. This all changed in the first quarter, when the global economy was hit by the pandemic and demand for oil plummeted,” says Erik Ronsberg, MD of Stena Drilling.
There was also an aggressive price war between Saudi Arabia and Russia, which caused the price of this commodity to dive. In January 2020, the Brent oil price was USD 63/barrel, but the price dropped to USD 25/barrel at the start of April, which brought all prospecting activities to a standstill overnight. In combination with the existing surplus drilling units in the offshore industry, this led several of Stena Drilling’s competitors to apply for Chapter 11.
PERSONNEL ON STANDBY
“Fortunately, Stena Carron could continue its assignment in Guyana, while Stena Don operated successfully up to the end of June. But the other rigs lost employment. To ensure the company’s survival, we were forced to take the very difficult decision to make employees redundant. We nonetheless retained as many employees as we could in a standby group, and this gave us a real competitive advantage when new contracts were offered in the second half of 2020. We also kept our drilling units in top shape, with personnel onboard to ensure that maintenance procedures were followed. This enabled us to secure a number of contracts for 2021, so that we could rehire many of the employees we were forced to lay off, since the rigs were in good condition and ready for operation. We expect that 2021 will continue to be tough, but are still optimistic, with brighter prospects for 2022,” says Erik Ronsberg.
One of the challenges arising from the pandemic, when everything closed down in March 2021, was bringing personnel home from their various assignments around the world. For the teams on Stena Forth, drilling off Peru, this resulted in a two-month voyage around the Cape of Good Hope to Gibraltar, and then on to the UK on a specially-chartered ship. Other personnel were stranded off the coast of Guyana, in some cases for over 70 days, and the company really appreciated their patience during the attempts to bring them home.
SAFEST DRILLING COMPANY
Stena Drilling’s goal is to be the safest and most effective drilling company in the industry. ”We seek to play an active role in the necessary transformation when it comes to reducing our emissions and contributing to the transition to carbon-neutral activities. We gained ISO 14001 c for environment management in 2019 and are now working to achieve ISO 50001 certification for energy management. This entails assessment of every aspect of our activities, from fuel saving measures and adaptation of digital technology, to employee training in energy efficient working methods,” says Erik Ronsberg.
In order to increase efficiency and reduce vessels’ fuel consumption and emissions, Stena Drilling has developed smart energy and emission meters, so that employees can monitor and reduce energy consumption in real time.
Stena Drilling is also known as a leader in the industry when it comes to safety. This is a strong competitive advantage in relation to oil companies, for which safety is a top priority. “We have a fantastic track record when it comes to preventing occupational accidents and we are continuously focused on improving safety,” says Erik Ronsberg. Stena Carron has been accident-free for ten years, and Stena Don for eight years.
Stena Drilling operates in a tough environment with a constant focus on safety and minimising the risk of oil spills. Stena Drilling works actively to reduce CO2 and NOX emissions. The reduction of these emissions in 2020 is mainly a result of fewer operating hours compared with previous years, as a consequence of the pandemic.
Share of Total income
Capital employed, MSEK