Offshore yard Keppel FELS in Singapore is brimming with projects, as the market for offshore drilling rigs and floating production units is booming. As the steel structures rise, so does the yard’s reputation. Millions of man-hours without lost time accidents and projects delivered on time speak volumes of their ability to perform.
A wholly-owned subsidiary of Keppel Corporation, Keppel Offshore & Marine (O&M) is one of the largest offshore and marine groups in the world. It has a strategic international network of 16 yards, but it all started with Keppel FELS.
With many projects going at the same time, the yard is filled with people and steel structures. More than 30 years of experience in offshore engineering sends many projects to Singapore and contracts to the desk of executive director Michael H. C. Chia.
“Our strength and expertise has been built over these many years, building all kinds of drilling rigs, such as jack-ups, semisubmersibles and submersible drilling barges. In between we also make floating production units,” says Michael Chia.
Market upswing
A cyclical market has left many yards in the dust in Singapore, but now the market is swinging up.
“Over the past few years, oil companies have focused on mergers and consolidation. Now they need to get back to drilling, and I think that is driving the market right now. If you look at the rig profiles, I think that half or more could be more than 20 years old, so the rig fleet needs modern replacements,” says Chia.
Oil and gas production
Two prestige projects currently ongoing at the yard are the construction of parts of the floating production units P-51 and P-52 for national oil-giant Petrobras in Brazil. Both are being built to DNV’s offshore class.
“We try to stand on two legs; one is drilling and the other is oil and gas production. The market is slightly different for these two segments, so we can achieve a balance. Until P-51 and P-52, we were probably more on the drilling side, but they are very big oil and gas production projects so it’s more balanced now.
Local content versus experience
Keppel FELS, the technology leader in the group, often build the more complex parts of projects and then ship them to other locations for final assembly. Keppel O&M established an offshore yard in Brazil in 2000. That local presence has been crucial, explains Chia, as Brazilian authorities demand a lot of local content.
“We tried to do more of the project at our offshore yard in Brazil for P-51, building on what we learned from work on P-52. Still, the more complicated parts of the lower hull, the nodes sections, are being done here in Singapore. Without our local presence in Brazil, however, it would have been impossible to get these projects,”
says Michael Chia.
He is confident that the experience with the P-51 and P-52 projects has put Keppel FELS in a good position to move forward with other floating production projects. He rules out establishing more yards in other strategic locations, however, saying “I think our footprint around the world is quite complete at the moment.”
Handling the stress of success
Chia lists a number of critical success factors in handling the yard’s workload; building experience, good engineering, R&D, execution on the ground, and solid project management.
“Standardisation is also very important. Many of these rigs are built to our own design, and everything is very much standardised. It makes construction far more efficient,” says Chia.
Team work and having the right people is also something he lists very high, because “No man can build a rig alone. This is team work.” In fact, one of Keppel FELS’ key strengths is its long experience.
“I think that in this business, to be good, you need to retain knowledge and experience in the company. Even in bad times we keep our core people and avoid downsizing too much. In two cases we even built rigs on speculation. That has been successful, fortunately, but it does involve some risk,” says Michael Chia.
Safety first
Business risk is one thing, but when it comes to safety, Keppel FELS has built an impressive record.
“On the Shah Deniz platform project for BP we clocked 5 million man hours without any lost time accidents (LTA). On the P-52 project we now have more than one million man hours without an LTA,” says Michael Chia.
He explains that while the yard can increase productivity, there is no such button to push for added safety. Says Chia; “Safety is not something that can immediately be shifted into gear. Safety must be built progressively through the years, because it has to do with mindset and behaviour of people, which is difficult to change.”
Keppel FELS have set up strict systems in their yard. Focusing on housekeeping in particular, the yard is kept tidy, clean, and well organised. “This is of course very much helped by our safety auditor DNV, assisting us in how to use the risk approach management to safety,” says Chia.