SHI Wins Order for Two Jack-up rigs Worth USD 1.3 Billion

By winning an order for the world’s largest jack-up rig, Samsung Heavy Industries has successfully advanced into the large jack-up rig market, which is emerging as a new growth engine for the shipbuilding industry. 

A bird's-eye view of Jack-up Rig SHI will build

Samsung Heavy Industries announced on the 12th that it had won an order for two units of large jack-up rigs for the North Sea from Statoil (Norway). The contract is worth approximately USD 1.3 billion. The price per unit, USD 0.65 billion, is even higher than the price of a drill ship, which are usually contracted at USD 0.5 billion to USD 0.6 billion. 

A jack-up rig is a drilling facility used to develop oil fields in the continental shelves. The facility fixes jack-up legs of the ship at the sea bottom, and makes the ship float on the sea surface for drilling. As the facility is capable of drilling without being affected by waves and currents, it is used in spots that are relatively shallow, yet have high waves. 

The jack-up rigs currently being operated are small to medium-sized facilities. The rigs can be operated in waters with a depth of up to 100m. Singapore and China have thus far been able to dominate the small-to-mid-sized jack-up rig market, thanks to their many years of experience and their price competitiveness. But the jack-up rig that Statoil has ordered from Samsung Heavy Industries is a large facility with a drilling capacity up to 10km deep in waters with a depth of up to 150m, and will be a high-performance facility built to cope with conditions in the North Sea of Norway, with its rough waves and the cold temperatures of -20 degrees Celsius. 

While small-to-mid-sized jack-up rigs are priced at USD 0.2 billion, the large jack-up rig is priced at USD 0.65 billion, which is more than three times the price of small-to-mid-sized jack-up rigs. This is the first jack-up rig that Samsung Heavy Industries has won an order for, and it is significant that the company has won the contract for the world’s largest jack-up rig as a newcomer to the market. 

A spokesperson for Samsung Heavy Industries commented, “Samsung Heavy Industries has been highly recognized for its dominant leadership in the drill ship market, which proves its excellence in the area of drilling technology. The fact that Samsung Heavy Industries has built various offshore structures and ships was also highly recognized in the bidding.