Servicing of drilling-rig BOPs

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1 Subsurface INVESTMENT OPPORTUNITY: Servicing of drilling-rig BOPs

2 Executive summary There is potential to have a local facility (operated by a local or international company) carry out periodic maintenance and inspection of drilling-rig blowout preventers (BOPs) on behalf of the original equipment manufacturer (OEM). Currently, most BOPs are shipped to the OEM s maintenance facilities outside of Qatar for periodic servicing (every three to five years), causing longer turnaround times and increased costs. With drilling rigs in operation in Qatar, this accounts for an opportunity of QAR 10-15M/yr from a local servicing facility. Local companies with BOP maintenance capabilities already exist in Qatar; however, they are currently not licensed by all OEMs. Land in a free zone and support for low-cost logistics, labor, and utilities could be provided, as well as streamlined customs processes. 2

3 Detailed opportunity description Servicing of drilling-rig BOPs Text Blow-out preventer A blowout preventer (BOP) is a specialized valve system used on a drilling rig to seal, control, and monitor oil and gas wells during drilling operations. The BOP prevents an uncontrolled release of oil and/or gas. To guarantee the BOP is functioning when needed, the OEM requires a periodic overhaul every three to five years, including the complete dismantling and individual testing of components in the BOP. An opportunity exists for a local mechanical workshop to carry out periodic BOP maintenance and certification on behalf of the OEMs. Localization opportunity Business scope Certification by the OEM of the drilling-rig BOP to be able to carry out periodic inspections and repairs on the OEM s behalf. A periodic inspection includes: Complete shop disassembly and cleaning of components Thorough visual inspection of structural or operating defects Measurement of critical dimensions and nondestructive testing (NDT) and minor and major repairs of components (including welding, heat treatment, and standard parts) Replacement of all elastomers, annular packing elements, and ram rubbers Reassembly, function, and pressure testing Out of scope Rig site inspections Manufacturing of new BOP components Capital intensity Low (QAR 0-10M) Medium (QAR 10-50M) High (QAR 50M+) 3

4 Market size Estimated spend (Qatar only) on drilling-rig BOP servicing, QAR M Historic Forecast Estimated number of on- and offshore drilling rigs in operation, number Key highlights Since 2013, the number of drilling rigs (on- and offshore) in Qatar has been relatively stable, and demand for periodic BOP servicing has produced approximately QAR 10M/yr. With increased drilling activity, especially offshore, forecasted for , demand for BOP servicing is expected to increase by approximately QAR 15M/yr. Currently, most periodic maintenance of drilling-rig BOPs is done outside of Qatar. Having a local maintenance company certified by major OEMs could reduce transport costs, turnaround delays, and provide an interesting investment opportunity for both local players and OEMs. Additional demand could come from drilling rigs active in the wider, addressable Middle Eastern region. Relevant stakeholders (2017) Top 3 buyers Other demand TOP 3 BUYERS : 4

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