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Among the more illustrious drilling contractors that have crashed and burned or have been swallowed up, such as Zapata, Reading & Bates, Offshore Company, Sedco-Forex, Pride, Global Marine, Santa Fe etc. there are a host of other smaller lesser known outfits who have disappeared over the years. One such is the little know, at least outside of South East Asia, Robray Offshore Drilling. I recently had an inquiry asking if I could direct them to an website that gave some history of this erstwhile Singaporean company but it predated the internet and there is precious little information available in the public domain. However, I worked for Robray for 25 years from its inception in 1974 and including the years when it was absorbed up by Norway’s Smedvig in 1986. It seems right to correct this lack of historical information about this small but pioneering company by at least a blog!

Robray was started and owned by Singaporean multi-millionaire Robin Loh who owned a shipping line, an airline, an IT company, a shipyard and more besides and had close connections to Pertamina’s then head Ibnu Sutowo, both of whom profited significantly from the relationship. Robin wanted to participate in the oil boom of the mid 1970’s and in partnership with Ray Williams, then Regional head of Reading and Bates, they formed Robray, placing a significant number of orders with National for drilling equipment for their planned fleet of drilling rigs. Initially they began with three heli-rigs that all worked in Indonesia while a sister company, Robin Shipyard, begin construction of the first two self-erecting tender assist barge rigs. Reading and Bates had pioneered the tender rig concept for development drilling off wellhead platforms and Ray Williams brought the concept to Robray as well as decimating his ex-company by stealing many of its regional management and rig crews. Before moving into Robin’s Robina House in Shenton Way the company began life in the Marco Polo Hotel. The conference room was the hotel lounge, renowned in Singapore for its Irish Coffee’s and the dresses worn by the waitresses!

The heli-rigs worked in Sumatra, Kalimantan and especially in Irian Jaya (Sorong) where Robin had family links. The rigs were eventually sold off, two to Indonesian contractor Medco/Apexindo and the other into Australia but they had served their purpose in getting the company started.

Meanwhile the first self-erecting tender rig, then called the HP Thrower after a founder member who had passed away but later re-named the Robray T-1, garnered a contract with Dubai Petroleum. Not long after the rig began work they had a major blow-out and the wellhead platform plus the rig’s derrick set were burnt to cinders. Robray quickly replaced the derrick set with that from under construction Robray T-2 (initially called Aquarius Star) thus gaining a reputation for fast action which it maintained throughout the life of the company. Replacement of T-2’s derrick set was made that much easier because Robin also owned manufacturer Pyramid Derrick who were in the yard next to Robray’s yard in Singapore. When Robray T-2 was completed it went to work off Balikpapan in Indonesia for Unocal.

Robray also built a platform rig, P-1, which was contracted to Esso Malaysia, and sat on the Tembungo platform off Kota Kinabalu in Sabah. When Malaysia introduced the PSC system Esso initially refused to play ball and shut down all its operations. P-1 was shut in for around one year, on standby rate and full crew, until Esso capitulated and agreed to Malaysia’s PSC terms. P-1 had become the cleanest and best kept rig in the world as the only action on board was chipping and painting.

By this time Ray Williams had retired and Jack Walters assumed the Presidency and the construction of the T-3 was underway. It also went to work for Unocal but in Thailand in 1980. A deal was also struck with Elf, in 1980, to build two more tender rigs, T-4 and T-5, for contracts in Gabon, won because by this time Robray had perfected the art of fast rig up/rig down operations that left their competition in the shade. Robray was the only company that was prepared to accept Elf’s limit on rig up times, which if memory serves me correctly was 12 days. By this time Robray had rig moves down to a fine art and averaged 5 days. Under the Elf contract Robray was paid full dayrate for 12 days irrespective of the time it took to complete the operation, which made it a lucrative contract.

Robray had by now established itself as the leading tender assist company, aided by the fact that their direct competition all operated less specialized and larger fleets that included more sexy jackups and floaters as well as their few tender rigs and their full focus was not always on keeping up with such a small market sector. In the spirit of that age Robray became known for being a  “can do” company, something that probably is not appropriate in today’s health and safety dominated world and they also developed a reputation as a very efficient and professional drilling company albeit operating in a small sector of the industry. Tender barges were limited by environmental factors to shallow water and benign environments which meant operations were restricted to South East Asia, parts of West Africa, Egypt and the Arabian Gulf. It also limited the number of clients it could work for as they could only drill off wellhead platforms in shallow benign waters but these clients included Unocal (later Chevron), Total, ExxonMobil. Elf, Total, Shell and Petronas among others. Robray befitted from being a small company that was based in the region where most of its fleet worked and had a small and young management team capable of making quick decisions without reference to a headquarters in Texas.

Unocal was an especially tough and demanding client to work for but they liked the job that T-3 was doing and called up Jack Walters and asked him if Robray would build four more tenders to work in Thailand. Much to many people’s chagrin Jack would only agree to build two thus allowing in new competition, Great Eastern Drilling, who built the other two rigs. Thus T-6 and T-7 came about and entered active service in 1982 and 1983 respectively. T-7 must hold the world’s record for the longest contract term as it worked for Unocal (and Chevron after the acquisition) for 30 years. The rig was scrapped in 2015 having only ever worked in Thailand and only for one client.

Earlier the company had sidetracked from the tender business into jackups, brought about when Robin purchased a jackup design (and the designer) from ETA for Robin Shipyard. While Robin Shipyard was building ETA Robco 300 jackups for India and China, Robray were themselves having two built of the same design but in Hitachi Zosen shipyard in Japan. The first, Ednastar, was completed in 1977 but did not go to work until the following year when it started up with Elf Oman before moving onto Total Iran and Total Abu Dhabi. The Iranian revolution put a stop to the Total contract and the rig was then sold off mysteriously to later emerge as the Yu Song in North Korea. It is now the COSL 935 and is working in China. The second, Ednarina, was sold after delivery to interests in Brazil but later also ended up in China as the Bohai IV. Robray never operated this rig.

Things were looking good by the early 80’s. By this time Jack Walters had gone and was replaced by Clyde Stephens, formerly with Unocal. But then came oil crisis of 1986 and like all drilling contractors Robray suffered financial difficulties with low rates for their rigs, loss of contracts and financing issues. T-4, by this time working in Egypt, was smuggled out of the country with creditors chasing it and Robin Loh had become disenchanted with the drilling industry and wanted out. Initially Clyde Stephens had seemingly reached an agreement for Foramer, a main competitor, to buy the company but Robin was not impressed with the offer and instructed Clyde to look at other options.  Unocal had already suggested to Clyde that he should approach Smedvig in Norway, an ambitious contractor looking to expand, and a deal was struck very quickly. Although some of Smedvig’s operations people were not impressed with these “simple drilling machines” Smedvig-Robray turned into one of Smedvig’s best and most profitable purchases.

Meanwhile Robray narrowly escaped a tragedy in 1989. Typhoon Gay struck the Gulf of Thailand where it capsized the Unocal owned and Great Eastern operated drillship Seacrest with the loss of 97 lives. The T-4 and T-7 also were operating in the Gulf at the time. The T-7 was hit first, losing 7 of its 8 anchor lines and only hanging on, with the help of a workboat, from either crashing into the platform or heading into the unknown. T-4 was hit next and was not so fortunate, losing all 8 anchor lines and took off under wind and wave power heading towards Cambodia, leaving the drilling crew abandoned on the platform. The rig’s main crane, a 150 ton Favco, was ripped off the deck by the force of the wind and lost overboard and although a workboat was gamely trying to keep up, the rig was out of control and in danger of sinking through water pouring into the hole in the deck where the crane had been. The Senior Pusher, Axel Lutz, is credited with saving the rig by filling the hole in the deck with mattresses and putting out sea anchors to slow the rig down. Meanwhile the drilling crew still on the platform had to survive a day of no food and water, wondering if they would ever see their colleagues on the rig again. Eventually the rig was collared by the workboat and returned to Songhla and the drilling crew rescued but the Seacrest, hit after the other two, was not so fortunate. Robray had been lucky.

With the North Sea market flat Smedvig had Robray market their big North Sea semis into Asia Pacific, with some success. Both the West Delta and the West Alpha mobilized into the region for charters in Indonesia, Vietnam and China. They were quickly yanked back to Norway when the North Sea market improved but had helped Robray gain more exposure in the region outside of the tender sector.

Smedvig were always looking for expansion. Owner Peter Smedvig’s aim was to be one of the top three biggest drilling contractors in the world and they looked to increase their already dominant share in the tender market by buying or building more rigs. Robray had always failed to penetrate Brunei, a Shell stronghold and then dominated by Petrodrill as Shell’s favoured contractor. Smedvig acquired Petrodrill thus acquiring the Tiga Kali, a non-self-erecting barge which became the T-8 and the Pelaut, built in 1994, the first ever semi-tender assist rig that was the brain child of Petrodrill owner Foster Manning. Apart from now gaining entry into Brunei, Smedvig then financed Robray to develop the semi-tender concept by building a second improved unit, West Menang, in 1999 which also went to work for Shell. Since then six more semi-tenders have been built by the company in its various iterations and the concept has been repeated by the likes of Atlantica, PV Drilling and Energy Drilling, the latter company basically a Robray Mark II.

When Clyde Stephens moved on, ex Smedvig CEO Staale Roed took over and become an enthusiastic exponent of the tender market, so much so that years later, after he left Smedvig, he became involved with Energy Drilling where he joined many ex-Robray colleagues.

The end for Robray came in 2006 when Seadrill acquired Smedvig and the Robray name disappeared forever. Seadrill later sold most of its tender rig division to Malaysian company SapuraKencana in 2013.

But Robray lives on through the many close knit ex-Robray personnel still with SapuraKencana and with Energy Drilling. As part of the Robray “family” we all were fiercely protective of the tender market and as was always said “Once a tender hand always a tender hand”. It was quite a ride. RIP 1974-2006.

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Source: U.S. Energy Information Administration, based on China National Bureau of Statistics and IHS Markit

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October, 24 2019
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October, 23 2019
Recalibrating Singapore’s Offshore Marine Industry

The state investment firm Temasek Holdings has made an offer to purchase control of Singaporean conglomerate Keppel Corp for S$4.1 billion. News of this has reverberated around the island, sparking speculation about what the new ownership structure could bring – particularly in the Singaporean rig-building sector.

Temasek already owns 20.5% of Keppel Corp. Its offer to increase its stake to 51% for S$4.1 billion would see it gain majority shareholding, allowing a huge amount of strategic flexibility. The deal would be through Temasek’s wholly-owned subsidiary Kyanite Investment Holdings, offering S$7.35 per share of Keppel Corp, a 26% premium of the traded price at that point. The financial analyst community have remarked that the bid is ‘fair’ and ‘reasonable’, and there appears to be no political headwinds against the deal being carried out with the exception of foreign and domestic regulatory approval.

The implications of the deal are far-ranging. Keppel Corp’s business ranges from property to infrastructure to telecommunications, including Keppel Land and a partial stake in major Singapore telco M1. Temasek has already said that it does not intend to delist and privatise Keppel Corp, and has a long-standing history of not interfering or getting involved in the operations or decisions of its portfolio companies.

This might be different. Speculation is that this move, if successful could lead to a restructuring of the Singapore offshore and marine industry. Since 2015, Singapore’s rig-building industry has been in the doldrums as global oil prices tumbled. Although prices have recovered, cost-cutting and investment reticence have provided a slower recovery for the industry. In Singapore, this has affected the two major rigbuilders – Keppel O&M and its rival Sembcorp Marine. In 2018, Keppel O&M reported a loss of over SS$100 million (although much improved from its previous loss of over SS$800 million); Sembcorp Marine, too, faces a challenging market, with a net loss of nearly 50 million. Temasek itself is already a majority shareholder in Sembcorp Marine.

Once Keppel Corp is under Temasek’s control, this could lead to consolidation in the industry. There are many pros to this, mainly the merging of rig-building operations and shipyards will put Singapore is a stronger position against giant shipyards of China and South Korea, which have been on an asset buying spree. With the overhang of the Sete Brasil scandal over as both Keppel O&M and Sembcorp Marine have settled corruption allegations over drillship and rig contracts, a merger is now increasingly likely. It would sort of backtrack from Temasek’s recent direction in steering away from fossil fuel investments (it had decided to not participate in the upcoming Saudi Aramco IPO for environmental concerns) but strengthening the Singaporeans O&M industry has national interest implications. As a representative of Temasek said of its portfolio – ‘(we are trying to) re-purpose some businesses to try and grasp the demands of tomorrow.’ So, if there is to be a tomorrow, then Singapore’s two largest offshore players need to start preparing for that now in the face of tremendous competition. And once again it will fall on the Singaporean government, through Temasek, to facilitate an arranged marriage for the greater good.

Keppel and Sembcorp O&M at a glance:

Keppel Offshore & Marine, 2018

  • Revenue: S$1.88 billion (up from S$1.80 billion)
  • Net Profit: -S$109 million (up from -S$826 million)
  • Contracts secured: S$1.7 billion

Sembcorp Marine, 2018

  • Turnover: S$4.88 billion (up from S$3.03 billion)
  • Net Profit: -S$48 million (down from S$157 million)
  • Contracts secured: S$1.2 billion
October, 22 2019