Japan Drilling Company – Beyond Drilling

JDC has an excellent reputation for value and reliability in the offshore drilling sector, but now the company is branching out.

Japan Drilling Company (JDC) provides quality offshore drilling services to oil and gas companies all over the world. Today JDC operates four jack-ups, one semi-submersible and one drillship. The firm has built an international reputation as a drilling contractor with an experienced and well-trained workforce through its 50 years’ wide-ranging drilling services.

“JDC is the only offshore drilling contractor in Japan which is operating international-standard oil rigs. That’s quite a unique selling point,” says JDC’s President Executive Officer, Takanori Hioki. “It has been 52 years since the company was established with the strong support of the Japanese Government and we are still an independent company.”

JDC’s expertise, experience, and reliability have been exemplified in their work on the HAKURYU-14 project. HAKURYU-14 is a self-elevating cantilever jack-up drilling rig operating at a water depth of 400 feet.

Rebuilding Production

HAKURYU-14 was newly built in 2018, and JDC was recently awarded a new drilling contract for the next second phase of the project by PT Pertamina Hulu Mahakam.

“The contract period will be a maximum of three-and-a-half years,” explains Hioki. “HAKURYU-14 will operate on the Mahakam block located offshore Balikpapan. The rig has been working for PHM since 2018, thus it can be said that our client appreciates the performance of HAKURYU-14.”

The HAKURYU-14 project is particularly important in light of a significant drop in oil and gas production from the Mahakam block in 2018. Indeed, PHM & JDC have been urged by the government themselves to drive a recovery in this sector. Fortunately, their performance so far has been admirable.

“HAKURYU-14 broke the ‘fastest well’ record three times at the Mahakam area in 4Q 2020. The phase one contract has been completed in February this year. Then the second phase has also been awarded to us and that started immediately after the periodical rig inspection was completed,” Hioki says. “We have been taking the initiative in improving rig performance, operational time, and costs. Our client is very appreciative of our efforts to do that. We have made every effort to reduce time and costs so far in these last two years. The client has been so impressed that they have awarded the next contract to us at a better price.”

JDC persists with projects like this despite the difficulties caused by the recent crash in the offshore market.

“We are still struggling, but we think we can make a profit through our efforts,” Hioki says. “One of the counter-measures we’ve put in place is to apply employees’ good ideas to reduce costs. Our employees are always negotiating with our vendors to bring down costs.”

Hioki explains that these cost savings are possible through the close relationships and open communication our employee share with these vendors.

“We maintain good relationships with our biggest suppliers. Particularly with our Indonesian vendors, who we find listen to our needs very attentively thanks to the long contract given by PHM,” Hioki says. “We make efforts to procure materials and services locally as much as possible, and have achieved about 35% of all procurement from the local market. However, we have no choice but to purchase expensive OEM spares from international companies because of no availability in Indonesia.”

The Right Crew

Of course, to deliver the results JDC not only needs strong supplier relations, but also an excellent pool of in-house talent. JDC has no shortage of that, despite the drilling market going through a challenging period. The secret, Hioki tells us, is word of mouth.

“The recruitment market is tough but there are still good people available. When our industry was very high-end in 2014 and 2015 it was very difficult to find and source the people we needed,” he explains. “But once we find the sort of good people we need, those people have connections with other good people, and so on as the effect snowballs.”

Another advantage JDC has had on its side in the search for good people is its location.

“Locally we have a strong manpower supply. To fill one position we have to interview five to ten people to find the right person,” Hioki says. “In this city Balikpapan, it is easier to find people compared to other cities in Indonesia because this is an oil city where the oil and gas industry is a major employer. There is a good supply of people who can speak good English and are experienced in the oil industry.”

While JDC has been able to find great people, the company is also keen to invest in and strengthen in-house talent.

“Normally we send our crew and staff for various training according to their professions and expertise,” Hioki says. “Sometimes we have trained our people in Singapore, UAE, Malaysia, Philippines even locally in Indonesia, but due to the current Covid-19 situation we’re now mainly training our staff online.”

Indeed, the Covid-19 pandemic has meant JDC has really had to go to bat for its own people. The pandemic has been particularly harsh on workers in the offshore sector, especially due to the mandatory isolation and quarantines when people entering and leaving countries.

“When they arrive at their home countries after finished their work offshore Balikpapan, they have to go into isolation for 14 days or so, and also when they come back to Balikpapan, they must have another round of isolation before going on board the rig,” Hioki says. “There are so many requirements and constraints, but they understand what they have to do for mutual benefit and are ready to accept that to continue working with us. That’s the strength of our company, and we treasure our employees. We’re taking care of them to the utmost.”

In light of the challenges posed by the Covid-19 pandemic, the company has reassessed the way it does things.

“We are trying to put one additional crew member in each position on the rig so that we could arrange the shifts in split shifts, not always back-to-back shifts,” says Hioki. “It makes it possible that our people have four weeks on board, then eight weeks off. The total working days on board will remain the same and also they can get almost the same time with their families even though they have to stay put for mandatory isolation for some weeks before and after their work offshore Balikpapan.”

Moving Forward

Meanwhile, following the success of HAKARYU-14, JDC has many other projects in the pipeline.

“Another two jack-up rigs are working in Qatar. The semi-submersible rig will start the new project in Myanmar soon and the fourth jack-up rig will work for the new project in Japan and then move to Vietnam for a Japanese company’s project this year,” Hioki tells us. “JDC always continues marketing activities worldwide, especially in the Asian countries where JDC has achieved a good reputation, such as Malaysia, Vietnam, Indonesia, and Japan.”

JDC is also on the lookout for new opportunities in other fields while the oil and gas development activities continue to shrink.

“JDC is seeking for new business in new energy areas, such as methane hydrate development and offshore wind power generation,” Hioki says.

He believes the wind power sector is particularly ripe for opportunity.

“Japan is surrounded by the sea and JDC is the only company in Japan which has expertise in offshore jacking operation and barge stability control, so JDC is in a good position to support the operation of self-elevating platform vessel in the offshore wind power generation field,” Hioki points out. “Also, we are starting a business using a hydraulic workover unit in the oil and gas industry. We don’t need to invest much money to own those units, however, the demand for this unit in South East Asia & Middle East will be rising.”

It’s going to be fascinating to see what JDC can make of these sectors.

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