Daewoo making big strides overseas

Explorers and producers of offshore oil and gas worldwide are busier than ever before with frequent calls to diversify energy sources in the face of skyrocketing oil prices.

Projects are being implemented globally in deeper, more remote, and more environmentally harsh waters than was previously the case.
For Daewoo Shipbuilding & Marine Engineering (DSME), the world’s second-biggest shipyard, this is an ideal opportunity to expand its overseas markets and develop technologies related to offshore, deep-water plants.
Daewoo is spearheading the drive to explore energy-rich regions, such as Africa, Latin America and Russia.
“The future lies on the African market,” DSME president Nam Sang-tae said. “Besides Angola, we’ve successfully entered the markets in Nigeria, South Africa and Tunisia, though a deal with Tunisia is drifting following the country’s democratic transformations.”
African market
In October, the second-biggest shipyard in Korea acquired a 30-percent stake in Angola-based shipbuilder PAENAL. PANEL opened in August 2008 and results from a $208 million investment by the partnership comprising the Angolan state oil company Sonangol Holdings with 10 percent and the Dutch service company SBM Offshore with 90 percent.
Sonangol subsequently raised its stake to 40 percent, while the other two partners _ Daewoo and SBM _ split the rest with 30 percent each.
Angola, for example, has the world’s 18th largest oil reserves and 42nd biggest natural gas reserves, he said. The crude oil sector accounts for about 60 percent of the Angolan GDP.
“PAENAL is the only shipyard in Angola capable of producing FPSO topsides process modules fabrication and integration,” he said.
FPSO (floating production, storage and offloading) unit is a facility for developing petroleum resources found under the ocean. These resources account for more than one third the crude oil production today, amid the declining number of new land oil wells being discovered.
FPSO has crude oil production facilities on the deck, called topsides, and crude oil tanks in the hull. It can move to any offshore field requiring it to engage in operations.
The FPSO facility has the capacity to process up to 220,000 barrels of oil and 1.9 million barrels of natural gas per day and has a storage capacity of 1.9 million barrels of oil.
Daewoo has a shipping venture with state-owned Nigerian National Petroleum Corp. In July, the firm reached a preliminary agreement to buy 49 percent of Impinda, a shipping company owned by Khulubuse Zuma, the nephew of South African President Jacob Zuma.
Nam visited South Africa last year to meet with Zuma for talks over a wide range of cooperation.
For Russia, Daewoo won an order worth $400 million last October to construct a marine plant in Russia. The firm secured the order from Exxon Mobil Corp. and planned to deliver the plant in 2013.
The shipyard also won a $800 million contract to jointly build oil carriers for Russia with its venture there. Daewoo will deliver 12 ships by 2014 to the Russian state-owned shipping company Sovcomflot OAO.
Deep-sea technology
To acquire indigenous technologies of lucrative deep-water plants, such as deep-sea drilling, Daewoo strives to boost its research and development of the deep-sea business.
“The deep-seafloor oil field development is still an unexplored field worldwide, though a couple of European companies are currently dominating the business,” Nam said. “We’re tasked with catching up with Europe in this field. To do that, we should maker more efforts on nurturing specialized human resources and technologies.”
Nam, as the representative of Korea’s shipbuilders’ association, proposed the top shipbuilder here differentiate their strategic items to enter the deep-sea market and compete with Europeans.
“In fact, each shipbuilder here has a different focus on its own. To prevent overlapping investments and overheated competition here before tapping the global market, the shipbuilders are recommended to coordinate their export items and targets in a sincere manner,” he added.
Nam’s comments come as the Ministry of Knowledge and Economy is scheduled to open bidding on the development of deep-sea exploration technologies later this year.
The project, dubbed the “localization of deep-seafloor offshore plant,” is part of the ministry’s six future-oriented state R&D projects. The project is valued at 310 billion won with the government footing the half of the cost.
“Amid soaring oil prices, the development of deep-water and harsh areas will create a new market,” the CEO said.
Export bids
As for the military export market, Daewoo is competing for an Indonesian submarine acquisition program worth $1 billion. Jakarta plans to buy four diesel submarines.
The company promotes its 1,300-ton, Type-209 submarine to compete with Russia, Germany and France. The Type-209 sub was built under technical assistance with Germany’s HDW.
The diesel/electric propulsion sub measures 56 meters in length and 5.5 meters in width. It can submerge to a depth of up to 250 meters and has an underwater endurance of about two weeks.
“I believe we have the upper hand in terms of technology transfer and submarine training programs in the Indonesian competition, compared to our rivals,” Nam said. “Negotiations are still under way and we expect good results.”
According to Daewoo officials, the shipyard has signed a letter of intent (LOI) with Awilco Offshore, a Norwegian drilling rig owner, for the delivery of four LNG carriers. The deal is valued at $800 million.
Once a final contract is signed, Daewoo will become the second Korean company to receive an order for LNG carriers after Samsung Heavy Industries. Earlier, Samsung signed a deal to deliver eight LNG carriers to Norway’s Golar LNG.
Industry watchers anticipate overseas orders for LNG carriers will continue to rise in the face of high oil prices and the nuclear crisis in Japan following a massive earthquake.
Major oil companies in Qatar and Russia are scheduled to give order LNG carriers, according to industry officials.