Diamond Offshore and GE Oil & Gas Enter Industry's First Performance-Based Subsea Blowout Preventer Service Agreement

- First-of-its-kind service agreement is a new model for offshore drilling industry

- Diamond Offshore's Pressure Control by the Hour™ model includes performance incentives to reduce downtime and improve system reliability for Diamond Offshore and its customers

- Under the arrangement, GE Oil & Gas will provide "engageDrilling™ Services" for Blowout-preventer (BOP) systems on Diamond Offshore's four 6th-Generation drillships, including management of maintenance, certification and reliability

- BOP systems included in the arrangement will be owned by GE

Diamond Offshore Drilling, Inc.and GE Oil & Gas announced on February 8 the offshore drilling industry's first-of-its-kind 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. This 10-year collaborative arrangement for GE's engageDrilling™ Services showcases a new way of thinking to drive continuous improvement in deepwater drilling.

The 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."

The GE Oil & Gas engageDrilling™ Services offering enhances BOP system availability by transferring the maintenance and service of pressure control equipment to GE Oil & Gas. This includes on-rig GE Oil & Gas personnel, management of parts, overhaul and repair, continuous certification, data monitoring, and management of change.  This new arrangement is a performance-based alliance that leverages the scale of GE data, predictive analytics, insights and continuous certification, positioning GE as a long-term commercial, operational and technical partner.

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. By transferring the maintenance and service of well control equipment to GE Oil & Gas, Diamond Offshore is simplifying operations and optimizing between well maintenance to reduce the frequency and duration of downtime. 

"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."