Sunrise sees a bright future in offshore drilling

A drilling platform heads from Qingdao, Shandong province to the South China Sea. China's private investors are seeking opportunities in the marine equipment industry, as the country attaches greater importance to offshore energy development. YU FANGPING/CHINA DAILY

As China attaches increasing importance to offshore energy development to meet domestic economic growth, private investors are seeking opportunities in the marine equipment industry.

Sunrise Group, a Guangzhou-based private shipping company, signed a contract valued around 5 billion yuan ($809 million) with Wuhan Marine Machinery Plant Co Ltd to purchase 10 offshore oil rigs.

Yu Xueqi, managing director of Sunrise, said it is significant that private capital participates in China's marine machinery industry which has been developing rapidly in the past 10 years.

For a long time, the companies in marine machinery sector were mainly State-owned enterprises due to the huge scale of investment.

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"Driven by the market, Sunrise entered the marine machinery sector under the background of rising private economy in the country," Yu said. "The new deal will bring opportunities to Sunrise."

WMMP, the manufacturer of the 10 oil rigs, is a subsidiary of the State-owned China Shipbuilding Industry Corporation. It will complete the construction in 18 months and deliver the rigs to Sunrise in Qingdao, Shandong province.

According to Sunrise, the rigs can be used in offshore oil drilling, oilfield construction, maintenance and other supportive functions. The company said it has reliable clients for these rigs but declined to give further details.

China's shipbuilding industry has suffered serious overcapacity in the years, affected by the gloomy shipping businesses. The State Council published guidance in October to improve the country's marine equipment development and encourage shipbuilders to transfer their capacity to marine area.

Driven by shrinking onshore crude oil output, the government has been making efforts to explore offshore oil resources. However, the lack of large-size equipment was an obstacle for many years.

China National Offshore Oil Corporation, the largest offshore crude producer in the country, has developed its own drilling platform that can be used in the South China Sea and the Bohai Sea.

Driven by the government's encouragement, China's shipbuilders are shifting to high-end marine machinery manufacturers, targeting developed energy markets.

In 2013, China's marine engineering orders reached a total value of $18 billion, 29.5 percent of the global market, up 16 percent year-on-year, according to public industrial data.

Established in 2007, Sunrise started its businesses based on ship chartering, trading and management.