Morten Kelstrup Interview: Analysing our Operational Records Globally

Mr. Morten Kelstrup talks with Ndubuisi Micheal Obineme of Oil and Gas Republic on how technology combined with new business model will drive greater value for the oil & gas industry and explaining how Maersk Drilling has been able to succeed with it.

OGR: Congratulations Mr. Morten Kelstrup for your new appointment as Chief Operating Officer of Maersk Drilling. What was your first impression when you were appointed as COO? Any surprises? And how has being your previous experience working as Chief Commercial & Innovation Officer so far?

Morten: I have a background on the other side of the fence, so to speak, having previously worked on the operator side of the business. My goal has been to use this experience to facilitate a greater understanding of how Maersk Drilling as a drilling contractor can create maximum value for our customers, the operators, and the countries we engage with. The organizational changes we most recently performed are one more step in that direction, where we have merged our Technical, Commercial, Innovation
, and Operational functions into one joint Operations department which will take end-to-end responsibility for customer delivery and operational efficiency.

OGR: What is your action plans to strengthen Maersk Drilling Operational records?

Morten: I’m happy to say that Maersk Drilling already has an outstanding operational record, with a financial uptime in excess of 99% so far this year. This translates into highly efficient operations for our customers. One example is recent operations in Ghana where our drillships have executed campaigns more than 200 days ahead of schedule, in this way helping to bring down the time to first oil. We remain focused on combining operational excellence with technological and business model innovation to drive greater value creation for the customers.

OGR: Collaboration and Innovation is seen as a key driver for the oil and gas industry. Please could you highlight some of the strategic partnership at Maersk Drilling and the benefits to operators?

Morten: In the North Sea, we have entered into a major alliance with Aker BP and Halliburton. Within this alliance, we collaborate much closer than you used to see in the industry, among other things establishing a shared vocabulary on safety and openly discussing which of the partners is best equipped to handle each of the many tasks involved in a drilling operation.

A few months ago, our Maersk Invincible rig on the Valhall field in Norway performed a 12-conductor run 36% faster than estimated and with a 23% cost saving versus the budget. This definitely showcases the potential value of working closely together as we do in the Aker BP alliance.

In addition, we have other kinds of strategic partnerships, such as you’ll find in connection with our West African operations where we have been very happy to team up with local partners on services including training and manning, and where we have also provided various kinds of integrated services to our customers.

We have also partnered up with the exploration company Seapulse. In this alliance, we will be responsible for delivering the full package of drilling services allowing Seapulse to focus on what they do best, namely finding oil. We will deliver these services in close cooperation with a few key partners allowing us to jointly optimize and eliminate waste in the drilling process. We see a significant upside in this area.

OGR: What are your solutions for the rapidly changing oil and gas sector, in
terms of technology?

Morten: Ongoing development of technology has always been an important part of the drilling industry, and as a drilling contractor you must always listen to the customers’ needs when scoping the rigs and technologies of the future. With that said, I don’t believe technology is the solution all in itself. There is no doubt that we will see further digitalization and automation of drilling operations, but in my view, an important key to unlocking significant extra value in the industry lies in aligning incentives to be able to increase the focus on removing waste across the value chain. By ensuring that operators and contractors work together towards mutual goals and trust each other to cooperate towards the most efficient solutions, all involved parties will benefit.

OGR: What ways have your technologies help oil companies boost productivity and reduce cost?

Morten: As mentioned previously, it is not only the technology but also technology combined with business model innovation that is making the difference. We at Maersk Drilling pride ourselves on the skills we have developed in the ultra-harsh North Sea environment, of course, and we have been able to successfully export this to drilling in other situations where cutting-edge skills and technology make a difference. For example, one of our drillships, Maersk Venturer, holds the world record for the deepest water depth ever drilled – 3,400m offshore Uruguay in 2016. But combining technological advances with a new approach to collaboration and aligning incentives with the customers is what will unlock real value.

OGR: How does local content development impact your operations?

Morten: Local content development is an important part of our operations since it’s a key part of creating shared value for our customers and the societies we engage with. In West Africa, for example, we have the ambition to engage in the conversation on how to collaborate across borders to build local capacity that benefits the region as a whole.

Our goal is to always do better than what is required of us in this arena. Local authorities will set minimum requirements for local content, but we want to go beyond that and include a higher ratio of local content than the bare minimum. I’m happy to say that we are succeeding in doing so, and one key factor in reaching that result is our focus on training local content via joint ventures with local partners and support for the institutions that are developing the country’s skills base. One recent example worth mentioning was when our drillship Maersk Voyager moved from Ghana to begin a new campaign in Equatorial Guinea.

After Maersk Voyager left Ghana, it only took three days before we were ready to start-up operations in Equatorial Guinea with a crew including 46% Equatorial Guinean nationals.

OGR: What are the available services in your company for clients who have business inquiries or seeking opportunities?

Morten: Maersk Drilling is a drilling contractor which is specialized in operating under the most challenging conditions. Our history started in the harsh and ultra-harsh environment of the North Sea where physical conditions can be extremely challenging, and you must adhere to strict regulations to have a license to operate. In addition, we now have a very flexible floater fleet that can operate from the shallowest to the deepest water depths, both of which present serious difficulties in their own way.

Based on this, our strategic direction is focused on seeking closer collaboration and operational alignment to create greater value for our customers, and as part of that stand ready to offer to orchestrate and deliver a diverse range of the additional services needed in a drilling campaign as it fits the individual customer.