Diamond Offshore, GE in Subsea BOP Service Agreement

Diamond Offshore Drilling and GE Oil & Gas signed contractual service agreement (CSA) that transfers full accountability for BOP performance to GE Oil & Gas.

In this Pressure Control by the Hour model, Diamond Offshore will compensate GE Oil & Gas only when the BOP is available.

The 10-year collaborative arrangement will include GE purchasing the BOP systems aboard Diamond Offshore’s four drillships, currently located in the U.S. Gulf of Mexico, for a total of$210 million.

“Subsea equipment repair and maintenance is the single largest cause of nonproductive time across our industry, resulting in great expense to both drillers and operators,” said Marc Edwards, President and CEO of Diamond Offshore. “In today’s market, we have to make the economics of offshore drilling more competitive for our clients. The purpose of our new Pressure Control by the Hour service model is to incentivize all parties to prioritize equipment reliability and availability for the ultimate benefit of our customers.”

“To deliver a solution that improves drilling efficiency now and in the future, collaboration is essential,” said Lorenzo Simonelli, President and CEO, GE Oil & Gas. “We are changing the game by building the new blowout preventer service model for the industry. With improved control, maintenance and servicing of our equipment, we are putting skin in the game and guaranteeing performance.”

Under the new service model, Diamond Offshore will begin capturing data through GE’s monitoring and analytics solutions. Over time, this will enable condition-based monitoring and maintenance, which will drive proactive decision-making and planning to address the requirements of industry standards for drilling systems, the company noted.

“This is a key part of GE’s business strategy to collaborate with drilling contractors and operators to push the boundaries of our industry,” said Simonelli. “Our new CSA model addresses the current needs of drilling companies, and establishes the roadmap for smart, predictive, condition-based services and maintenance in our digital-industrial future.”

“We look forward to partnering with GE Oil & Gas to lead the way forward in our industry,” said Edwards. “By combining Diamond Offshore’s operational excellence with the guaranteed performance of GE’s BOPs, we are increasing our competitiveness in the market.”