Offshore focus: seismic vessels

Polarcus is currently building four ultra-modern new build seismic vessels, in Drydocks World’s flagship yard in Dubai.

Three of these new builds are high end 12 streamer 3D vessels, and the remaining one is a multipurpose vessel for either 6 streamer 3D operations or source operations for wide azimuth projects.

Guiding the good ship Polarcus is CEO Rolf Ronningen, bringing 28 years of seismic experience to the helm.

From his office at the top of Dubai’s skyline, the waters into which the first vessel, Nadia, will be launched this month, are just visible. Polarcus, a brand new start-up has obviously joined the industry in a tough year, but Ronningen’s enthusiasm hasn’t been dampened by events outside the company’s office.

“Today we are a four vessel company. We started with six vessels, but because of the financial crisis we did not see that we would be able to fully fund all six vessels. We were faced with a choice and we decided to sell the vessels to the founding shareholders, essentially transferring the risk whilst holding a purchase option to buy the vessels back.”

Ronningen hopes the company will be in a position to re-acquire the remaining two vessels in 2010.

The first two vessels are due to be delivered in November and December this year, and the company has already secured a contract for the launch vessel Nadia. “We have signed a Letter of Intent with TGS-NOPEC Geophysical Company ASA (TGS) for the charter of the 12 streamer 3D seismic vessel Polarcus Nadia for around three months commencing in December 2009. The Letter of Intent further includes a right of first refusal for TGS to extend the charter in two six month increments under pre-agreed terms”

The Polarcus Nadia is the company’s first newbuild and incorporates leading design features that will position her as one of the most advanced seismic vessels in the industry. With the first contract under its belt, business for Polarcus could really take off next year. “We have 17 bids outstanding with the oil industry, and we have been told we are the front-runner in some of those tender bids,” beams Ronningen. The company is targeting key strategic areas of business, initially East Africa – stretching from Madagascar to Somalia and the Mediterranean, and is hoping to tap into the hotspots of activity from Oceania and the Arctic.”

Polarcus will own and operate the vessels itself – a strong offering to oil and gas companies. “The fewer management systems you have on board the better as far as exploration is concerned,” says the CEO.

When the oil price is below a certain level, exploration tends to drop off, and drop off fast. However, high-level seismic is the most resilient marine market to this volatility. In the late 90s when the crisis hit, most high-end towed seismic operators remained cash-positive. That said, it’s not as though the market has escaped the lull completely.

“Compared to where it was a year ago, there has been a very significant reduction in vessel prices. But I am confident we have seen the bottom of the cycle. There were very few leads coming up back in March, but now there is a heck of a lot of activity. From the second half of next year I am very, very confident that utilisation and rates will have bounced back.”

Given the shallow waters lapping at Arabian Gulf’s edge, most seismic activity in the Middle East tends to be carried out by bottom laid cables, with the depth and infrastructure ‘clutter’ making accurate readings more challenging for towed seismic operations. However, Ronningen says the lack of competition in the region is a real advantage. “There are no seismic companies based here, yet when you look at the concentration of resources here, we see a big opportunity. It also has additional benefits. It’s very easy to attract people to come to Dubai. I have experience in Norway, Singapore and the US, but this is by far the easiest place to attract people.”

The Polarcus asset Ronningen is most enthusiastic about is the company’s ultra-green ethos. “Our unique offering is the Explore Green technology. This is not just repackaging something and calling it environmentally friendly. It is real and we are taking way beyond CSR. We are massively reducing particle exhaust emissions. All of the vessels are double hulled which is an extra expense, but one that in the event of a grounding, could prevent any pollutants escaping.”

Ronningen reveals that the extra build-costs are paying off already. The company has had pre-qualification meetings with Shell in The Hague, which he is excited about. “The head of that department is determined to make the seismic industry more environmentally sound. Typically, Shell does not accept a seismic company until they have a certain track record, but with what we are bringing to the table, Shell will be happy to fast-track the approval. And this is a fairly typical example of the reactions we’ve had from oil companies. There is a lot of enthusiasm for this,” he concludes.

Cutting Edge

The X-Bow is an exciting development. In bad weather, rather than smashing into waves, which retards the flow of the vessel, these bows will slice through the water, reducing pitch. As well as a more comfortable ride, it actually uses half the fuel at the same speed as a conventional vessel, or twice as fast for the same fuel consumption.

Ship Ahoy!
The Polarcus vessel Nadia splashes into service in November, launching from the local fabrication yard, Drydocks World – Dubai.

Bow wow factor: Ulstein group

Ulstein, ship designer of the X-Bow vessel type also has a stake in the Polarcus project, says Gunnar Haug, regional director of Ulstein Middle East.“We occasionally enter into projects as stakeholders, partly to show interest in the project, but also to make it easier for a customer to realise his project. We inject some capital and then sell out after a couple of years. Essentially this acts as a facilitator,” says Haug.

“There are many ways to help the client with financing, and I think this sort of stakeholder and financing collaboration is likely to increase in the future.”

Ulstein is also building seismic vessels for Western Geco, a subsidiary of oilfield service giant Schlumberger. The first two seismic vessels with the Ulstein X-Bow, WG Columbus and WG Magellan, have been working together in the Gulf of Mexico throughout the summer. WG Columbus, hull number 1657, was delivered in March, while WG Magellan, hull number 1658, was delivered at the end of July. Both vessels were built at Barreras in Vigo, Spain. Western Geco currently have four ULSTEIN SX124 vessels under production, two at Barreras and two at Drydocks World in Dubai. The Dubai vessels are planned for deliveries in 2009 and 2010.

Aside from the seismic vessels, Ulstein is a designer of offshore construction vessels, field support and well intervention vessels.

“The Arabian Gulf waters often demand vessels with a draught of less than six metres, so we are working to adapt our workboat and support vessel designs to fit the needs of the local market,” reveals Haug.