Despite compliance hurdles for drillers, Rowan Drilling chief exec Matt Ralls said he expects to have four "Norway-spec" jack-ups working the local continental shelf by 2014.
"I'll try to make a compelling argument for being able to drill in your pristine waters," Ralls told a conference audience at ONS 2012.
Lower day rates for jack-ups over other types of rigs suggest Norway-based oil companies are missing out on the kind of cost-cutting that could boost oilfield recovery rates, always a priority in this oil-rich land of five million.
A tiny fleet of jack-ups ply Norway, yet just nine of 200 rigs in recent worldwide build programmes can work in the Scandinavian country. Ralls said it spelled opportunity for a company boasting four 'N' --- for 'Norway' --- class rigs in its fleet of 14 jackups.
He'll first have to convince regulators and the Norwegian industry that lower costs don't mean compromised safety. His arguments were compelling: "There does not seem to be a sizeable difference in accident rates on the Norwegian side versus the UK side (of the North Sea)," he said.
Ralls reminded listeners that Rowan built the first self-contained floating rig in the early 20th century. Then he catalogued prohibitive Norway-sector costs.
In one example, a Rowan rig needed a USD30 million upgrade before it could move 18 miles across the UK-Norway maritime border to drill a well in Norway (where the NORSOK contract standard, built on green strictures, is enforced by the Petroleum Safety Authority).
He said the extra costs were factors for all drilling contractors and meant rigs that would ease day rates in Norway were staying away. His USD 550 million new-build N-classes --- which can pivot do to production work and carry 20,000 psi blowout preventers --- needed day rates increases of of USD 25,000 to earn benchmark investment returns of 12 percent.
Despite the health and safety rules that cost, Norway's two-weeks-(onshore)-four-(offshore) shift work meant employee costs were greater here while forcing pricy delays ahead of cross-border moves of rigs with crews.
Higher costs means a Norway-sector jack-up needs a USD 370,000 day rate to earn its 12 percent (compared to just USD 161,000 for global jackups). Only a new trend toward five-year contracts has brought any relief from rig-company investment fears.
Rowan, meanwhile, has been acquiring rigs as fleets age. Its 11 newbuilds of the past five years target renewal and new oil provinces, as 83 percent of all the world's rigs reach 25 years of age.
In Norway, where the country's rig contractors have mostly ordered pricier semi-subs of late, Rowan projects it'll have four new vessels within two years.
"When that happens the Norway market will be our single largest source of revenue," Ralls said.