DRILLING MARKETS & LEADERSHIP
want to use technology to help people do
their jobs more efficiently and more safely.

What are some ways in which you see
the energy transition changing either
Valaris or the wider drilling industry in
the coming years?
The Valaris DS-12 drillship was the first vessel in the world to receive the ABS En-
hanced Electrical System Notation EHS-E in 2021. Valaris says it will continue to in-
vest in rig equipment upgrades as part of efforts to reach its goal to reduce the
company’s Scope 1 emissions intensity by 10-20% by 2030.

First, there are still great opportunities
for the use of technology. We’ve deployed
the Valaris Intelligence Platform (VIP),
which collects data on the rig and uses
machine learning, positioning ourselves
for more advanced AI solutions. By uti-
lizing data that historically wasn’t being
used, the system is alerting us to potential
issues, either with the wellbore or with rig
equipment, which we can address early on
before they become major problems.

We’re continuing to progress our ability
to assess data from multiple sources on
a real-time basis. It’s going to allow us to
go beyond human capability to drive real-
time decision making on the rig.

Another way in which we’re using AI
is for red zone management, by keeping
people away from large, moving equip-
ment and potential dropped objects. With
this type of technology, ultimately, we
won’t need to have our people avoiding
equipment; we will be able to make our
equipment smart enough that they will
avoid people. That’s where we’re headed.

We’re also doing a lot of work with
automation. On our DS-17 drillship, which
is starting up operations for Equinor in
Brazil’s Bacalhau region, we just installed
42 the ATOM RTX system from NOV. These
are robotic arms on the drill floor that
can perform a variety of tasks, such as
transferring pipe stands to and from the
well center, auto doping, etc. In our case,
per the contract requirements, these are
going to be used for automatic doping of
the drill pipes.

The system has been used onshore, but
this is the first application on a rig floor
offshore. We’re starting by using these
arms for simpler tasks like pipe doping,
but there is great potential for them to take
on other activities, which will help us keep
crews out of harm’s way while also driving
consistency in our operations.

How have those robotic arms been
received by the rig crews?
I think they’re quite happy about it.

Look, there’s always something else that
a crew can do. If we can take a repetitive
task off their hands so they have 5-10 extra
minutes to plan the next job, that’s a good
thing. We have to remember that technology
is a facilitator for people. Like I said earlier,
people are the heart of our operations. We
First, I want to make it clear that drill-
ing contractors and drilling rigs will be
needed for multiple decades to come, even
under the most aggressive scenarios for
the energy transition. It’s overly simplis-
tic to think you can just flip a switch to
renewables. This needs to be a managed
process, and we need to consider what
would be the cost to the world of not hav-
ing reliable and affordable energy.

Of course, drilling contractors will have
to evolve as the energy transition contin-
ues. Maybe in the future we’ll be drilling
more gas wells instead of oil wells, more
carbon capture, utilization and storage
(CCUS) wells, or even offshore geothermal
wells. We’ll also need to continue investing in
our operations and equipment to lower our
overall carbon footprint. At Valaris, we’ve
set a goal to reduce our Scope 1 emissions
intensity by 10-20% by 2030, compared
with a 2019 baseline. I believe that is a
credible target range that we can achieve
with existing technologies.

For example, I mentioned that we’ve
launched the VIP platform to optimize our
rigs’ power generation. Another example
is the VALARIS DS-12 drillship, which was
the first vessel in the world to receive the
ABS Enhanced Electrical System Notation
EHS-E back in 2021, recognizing the rig’s
upgraded electrical system to optimize
its power plant performance. The result
is fewer generators used and, therefore,
reduced emissions.

So far we’ve seen a reduction in the
order of 5-7%, which is a good start. We’ve
also done the same upgrade on the DS-17
drillship that’s starting up operations in
Brazil. We’re also looking at upgrades that
allow for the electrification of jackups
and enable floaters to use biofuels. Both
options hold great potential to reduce
emissions. However, there are challenges
around access and infrastructure. On top
of that, there is also a cost component to
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DRILLING MARKETS & LEADERSHIP
doing these types of upgrades, which is
something where we need the operator’s
support. In today’s market and with higher inter-
est rates, the cost of capital is meaning-
fully higher. Reducing emissions intensity
is very important to us, as well as to our
customers, and we want to do our part
in helping them to provide responsible
energy to the world, but we have to be very
disciplined about where we allocate our
capital. How do you see that difficulty in
accessing capital impacting drilling
contractors now and in the future?
I think it’s clear that we’ll need to man-
age this business differently than how it
was managed before. Companies will have
to be much more disciplined about manag-
ing their balance sheets, which means not
speculatively building new rigs and not
speculatively reactivating rigs. Overall, we
have to be much more thoughtful about
bringing assets to the market.

Generally across the industry, that’s
exactly what we’re seeing so far. For our
own part, Valaris has said that we won’t
reactivate a rig unless we can generate a
meaningful return on the reactivation cost,
and that’s what we’ve done.

Can you talk about Valaris’ joint ven-
ture with Saudi Aramco, ARO Drilling?
What is your outlook for the drilling
market in Saudi Arabia, and what is
allowing such a large newbuild pro-
gram there? ARO Drilling has stated
that it’s committed to building 20 new
jackups over a 10-year period.

Saudi Aramco is the world’s largest user
of jackups in the world, and the Saudi mar-
ket for high-spec jackups continues to be
incredibly attractive.

Their newbuild program is focused as
much on fostering local content in the
Kingdom as it is on security of rig sup-
ply. The first two rigs of the ARO 20-rig
program, which are expected to be deliv-
ered before year-end, are being built in
the United Arab Emirates, but the next 18
are going to be built at the International
Maritime Industries’ yard in Ras Al Khair in
the Kingdom. That’s going to be the world’s
Valaris recently started deploying NOV’s ATOM RTX system in Brazil. The system
uses robotic arms to perform a variety of tasks on the drill floor.

second-largest rig yard when it’s completed
and will contribute toward supporting local
jobs and the building of local capabilities.

Each newbuild will also be built against
16 years of contract term – you just don’t
see that anywhere else in the world.

Economically speaking, these rig projects
not only make sense but are highly attrac-
tive. It’s definitely exciting for Valaris to be
able to partake in the amazing growth
story going on there. DC
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