Oil rigs the wave of the future for shipbuilders

According to CANSI, more than 110 Chinese shipyards have begun to produce different types of maritime engineering vessels or equipment, such as offshore wind power devices, maritime crane ships, and dredgers for both domestic and international buyers, including China National Offshore Oil Corp, China Huaneng Group, Exxon Mobil Corp and Royal Dutch Shell Plc.

Not only shipyards but China's largest heavy machinery maker, Shanghai Zhenhua Heavy Industry Co Ltd (ZPMC), also is cashing in on rising demand for maritime engineering products.

Maritime engineering contributed 10 percent of ZPMC's total revenue in 2009, far behind port cranes and large steel structures.

Riding on global orders, contracts for marine engineering equipment and steel structures totaled $1 billion in the first half of 2013, accounting for 34 percent of ZPMC's total contracts, which rose 71 percent compared with the same period last year.

"This industry won't face a slowdown over the next several decades. Deep-water fields are expected to be the main sources of conventional energy yet to be discovered and developed," said Dai Wenkai, ZPMC's executive vice-president.

Dai said deep-water pre-salt resources in South America alone are estimated at 70 billion barrels of oil equivalence, a figure that may continue to grow as more underwater locations are found.

To strengthen its maritime engineering capacity and technology, in 2010, ZPMC's parent company, China Communication Construction Co, paid $125 million for the US-based Friede Goldman United, one of the world's leading providers of design services and equipment for offshore drilling rigs.

"This acquisition gives us an advantage to build new vessels with a more complex technical edge," Dai said.

In 2012, ZPMC invested $70 million in maritime engineering research and development projects managed by more than 800 designers and experts.

The company hopes to gain more technical breakthroughs in developing derrick pipe-laying vessels this year, which can be used in cold water such as found in the North Sea and the Arctic.