China Shipbuilding Industry’s Offshore Business &
Views on Shipbuilding VS. Offshore
- from a Shipbuilder’s View -
ZHANG Yonghui China Institute of Marine Technology and Economy
OECD Council Working Party on Shipbuilding (WP6) Workshop on shipbuilding and the offshore industry, Monday 24 November 2014 About Us China Institute of Marine Technology and Economy is a research institute of CSSC. shipbuilding market research shipbuilding economy research shipbuilding industry policy research shipbuilding technology research shipbuilding standard research shipbuilding industry IPR research
OECD Council Working Party on Shipbuilding (WP6) Workshop on shipbuilding and the offshore industry, Monday 24 November 2014 2 Content
1 China Shipbuilding Industry’s Offshore Business
2 Views on Shipbuilding VS. Offshore
OECD Council Working Party on Shipbuilding (WP6) Workshop on shipbuilding and the offshore industry, Monday 24 November 2014 3 1 China Shipbuilding Industry’s Offshore Business 1.1 The history
In 1966, the first offshore production well of China was drilled in Bohai Bay.
In 1971, China’s first jack-up rig “BOHAI 1” was delivered by Dalian Shipyard.
In 1973, China’s first catamaran drillship “KANTAN 1” was delivered by Hudong Shipyard.
In 1984, China’s first semi-submersible rig “KANTAN 3”was delivered by Shanghai Shipyard.
In 1989, China’s first FPSO “BOHAI FRIENDSHIP” was delivered by Hudong Shipyard.
China Institute of Marine Technology and Economy 4 1 China Shipbuilding Industry’s Offshore Business 1.2 The performance
By the end of 2013, China shipbuilding industry has delivered
31 jack-up rigs
16 semi-submersible rigs
2 drillships
23 FPSO (including FPSO conversion projects)
Hundreds of offshore service vessels
China Institute of Marine Technology and Economy 5 1 China Shipbuilding Industry’s Offshore Business 1.3 What we can do now
Products Basic Design Detail Design Shop Design Construction Jacket Platform √√√√ FPSO/FSO Hull √√√√ Living Quarter √√√√ Topside Modules ??√√ Jack-up Rig √√√√ Semi-sub Rig √√√√ Drillship √√√√ Seismic Ship √√√√ Construction Vessel √√√√ PSV & AHTS √√√√
China Institute of Marine Technology and Economy 6 1 China Shipbuilding Industry’s Offshore Business 1.4 The major player Major Player Main Shipyards Offshore Products • shanghai waigaoqiao shipyard FPSO, jackup rig, semi‐sub rig, • shanghai shipyard drillship, construction vessel, CSSC • huangpu shipyard, other OSVs, offshore unit • CSSC guangzhou dockyard repairing and conversion • dalian shipyard FPSO, jackup rig, semi‐sub rig, • shanhaiguan shipyard drillship, construction vessel, CSIC • wuchang shipyard other OSVs, , offshore unit • qingdao beihai shipyard repairing and conversion • COSOC dalian shipyard jackup rig, semi‐sub rig, COSCO • COSOC nantong shipyard construction vessel, other OSVs Shipyards • COSOC guangzhou shipyard CIMC Raffles • CIMC yantai shipyard jackup rig, semi‐sub rig, OSVs • CMHI shenzhen shipyard jackup rig, offshore unit CMHI • CMHI nantong shipyard repairing and conversion
China Institute of Marine Technology and Economy 7 1 China Shipbuilding Industry’s Offshore Business 1.5 The orderbook by the end of 3Q of 2014
Type No. Total Jack‐up Rigs 65 Drilling Rigs Semi‐sub Rigs 9 80 Drillships 6 FPSO Newbuilding 3 FPSOs 5 FPSO Conversion 2 PSV 185 OSVs AHTS 125 409 Others 99
China Institute of Marine Technology and Economy 8 Content
1 China Shipbuilding Industry’s Offshore Business
2 Views on Shipbuilding VS. Offshore
OECD Council Working Party on Shipbuilding (WP6) Workshop on shipbuilding and the offshore industry, Monday 24 November 2014 9 2 Views on Shipbuilding VS. Offshore 2.1 Market driving factors Shipping freight and shipbuilding contracts Oil price and offshore contracts
300 M. DWT USD/DAY 35000 100 Billion USD offshore contracts value USD/Barrel 120
250 30000 Brent oil price 25000 90 200 20000 150 50 60 15000 100 10000 30 50 5000
0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014.1 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014.1 ‐ ‐ 9 9 z world economy, sea trade, shipping z world economy, energy demand, oil price, market, freight level, etc. offshore E&P investment, etc.
China Institute of Marine Technology and Economy 10 2 Views on Shipbuilding VS. Offshore 2.2 Business characters Shipbuilding Offshore Construction Contract（T&C is determined by Service Contract（T&C is determined by tender specification） document） Series design, series and batch orders Single design, single order, discontinuous orders
Standard Design Project Design Customers, contractors and subcontractors are Customers are less involved in the newbuilding integrated and frequently interact in the process of process project execution Built according to the approved drawing, rarely Engineering, construction and installation interact in change design the process of project execution, often change design Standard raw materials and equipment supply Suppliers are part of the project group, and mode everything is traceability Process Control (HSE, QE, Subcontractors/Suppliers, Result Control Duration, Cost, Document) global sourcing local content requirement
China Institute of Marine Technology and Economy 11 2 Views on Shipbuilding VS. Offshore High-tech & high value-added
Customization & complicated
China Institute of Marine Technology and Economy 12 2 Views on Shipbuilding VS. Offshore 2.4 Challenge for the shipyards
¾ Higher technical requirements, higher engineering and integration abilities
¾ Capability of manage large and complicated projects
¾ Good supply chain control to ensure delivery cycle
¾ Higher requirements for HSE and QC
¾ Customers’ special and sometimes severe requirements
¾ Capability of financing a large and complicated project
¾ Higher risk tolerance
China Institute of Marine Technology and Economy 13 Conclusion Remarks:
¾ Shipbuilding and offshore have lots of similarity, such as supply chain of raw materials and equipment, rules, regulations, standards, construction technology, assembly process and so on. As above said, they are so different in the many aspects. It is necessary for the shipyard to be quickly familiar with and adapt to these characteristics, when they enter into the offshore business. ¾ China shipbuilding industry has a long history of offshore business. Recent offshore achievement of China is based on the long-term accumulation, and also on the improvement of shipbuilding technology and project management. However, there is still a gap for China shipbuilding industry, especially in the aspects of engineering, R&D and localization of equipment supply. ¾ To strengthen communication and cooperation is the way to realize win-win. China shipbuilding industry hopes to develop offshore market with counterparts of other countries in the future. Thanks for your attention.
ZHANG Yonghui Email: [email protected]
China Institute of Marine Technology and Economy
OECD Council Working Party on Shipbuilding (WP6) Workshop on shipbuilding and the offshore industry, Monday 24 November 2014