Off-shore deepwater drilling requires huge vessels
With global demand for oil showing no sign of abating, the industry is going to ever greater lengths to secure supplies.
Juliana Liu reports from Singapore, where firms are investing heavily in deepwater exploration, taking the search for oil to the very bottom of the ocean floor.
Tall as a nine-storey building and as long as two tennis courts, the anchor handling vessel is the work horse of the offshore oil industry.
The entire deepwater exploration and drilling industry has boomed in the last few years, driven by a persistent rise in oil prices.
Take Ezra Holdings.
The firm runs the largest fleet of anchor handling ships among Singapore's listed companies. Known in the industry as tug boats, the vessels tow and anchor massive oil rigs deep into the ocean floor.
Ezra's profits more than doubled so far this year.
The firm plans to double the size of its fleet by the end of 2007 to take advantage of demand for its services.
"Ezra is well-positioned to take advantage of the uptrend in the market," says Lionel Lee, Ezra's managing director.
"We will be taking delivery of new vessels at a rate of about one per month for the next 16 months."
Ezra is not the only firm benefiting from higher energy prices.
Others include international competitors such as Tidewater and Solstand Offshore, as well as big-name clients such as BP and Total.
The cost of a barrel of oil stood at about $30 four years ago.
Since then, prices have more than doubled, and the world's oil giants are scrambling to secure supplies.
More than ever, they are trying to go hundreds of miles offshore to deepwater oil fields.
Deepwater drilling will account for 25% of offshore oil production by 2015, compared to just 9% now, according to experts.
West Africa is expected to be the region of fastest growth for deepwater drilling, followed by Europe's North Sea region and Southeast Asia.
The coasts off India, Malaysia, Australia and Indonesia are also prime targets for exploration and production.
Pumping for crude oil under the sea is more expensive than extracting it from established wells, but the remote location is part of the appeal.
"These are areas that are not so politically sensitive," says Choo Chiau Beng, chairman and chief executive of Keppel Offshore & Marine.
"Deepwater is currently where the big reserves are. Not yet developed, not yet explored."
Keppel, also based in Singapore, makes half of all offshore rigs in the world.
Deepwater oil rigs used by the industry can be as tall as a skyscraper, and house hundreds of crew members, who arrive and leave by helicopter or on other vessels.
For now, oil producers can't get enough of these rigs, which cost hundreds of millions of dollars and take as long as four years to build.