Development of marine engineering manufacturing: China still lacks an industrial chain

Compared to ordinary vessels, offshore engineering equipment requires significantly less steel, while the volume of outsourced equipment increases substantially. For example, for a 5000-foot semi-submersible drilling platform costing US\$500 million, the equipment procurement accounts for 66%. Currently, the standards and quality control of these equipment, as well as legal risks, are controlled by foreign institutions and companies. Pricing, delivery time, and the formulation of legally binding clauses are all determined by others.
　Compared to traditional ships, marine engineering projects have their own unique and cutting-edge technological characteristics. Advanced construction technologies and project management experience are only mastered by a very small number of countries in the world. China, as a major shipbuilding country, is only in the second tier.
　The procurement mechanism of shipyards has undergone significant changes.
The construction of offshore engineering equipment differs from the construction of conventional ship types. First, the procurement model of shipyards has changed significantly. Shipbuilding costs mainly include labor costs and the costs of outsourced materials and equipment. From the perspective of outsourced costs, for the construction of an ordinary conventional ship, the price of outsourced steel and copper materials accounts for approximately 10% to 15% of the total project cost. However, for the construction of a large semi-submersible drilling platform, the proportion of equipment procurement accounts for approximately 66% of the total platform cost, with the price of outsourced steel accounting for only 3% of the total platform cost. The overall procurement mechanism of shipyards will shift to being primarily equipment-based.
　On the other hand, compared to ordinary ships, offshore engineering equipment projects will include more specialized equipment for offshore oil extraction, such as drilling and workover equipment, pipelaying equipment, and auxiliary equipment such as positioning systems, jack-up systems, and tensioning devices. Shipyard equipment procurement will transition from a single-item equipment procurement mechanism to a complex system procurement mechanism.
　Taking the two most typical and cutting-edge ship types in marine engineering projects as examples: one is a semi-submersible drilling platform, and the other is a jack-up platform. For a 5000-foot semi-submersible platform, the total equipment procurement cost is approximately US\$330 million. Based on a platform cost of US\$500 million, equipment procurement accounts for approximately 66% of the total platform cost; the entire drilling package accounts for 63.64% of the entire equipment package; and the bundled price of the platform power system is US\$15 million, accounting for approximately 4.55% of the total equipment cost. For a 400-foot jack-up platform, the total cost is approximately US\$190 million, with equipment procurement costing US\$110 million, accounting for approximately 58% of the entire project. In the entire equipment procurement, the drilling package is worth approximately US\$60 million, accounting for approximately 32% of the total project cost and 55% of the total equipment procurement for the project. Most of this equipment is mainly purchased overseas, concentrated in the hands of well-known ship-supporting suppliers such as GE, F&G in the United States, Aker in Norway, Siemens in Germany, ABB in Sweden, Wärtsilä in Finland, and Rolls-Royce in the United Kingdom.
　The development and establishment of the offshore engineering industry supply chain is a major challenge.
For China's offshore engineering industry, there are two main challenges: one is the control of standards and quality, and the other is overseas risks. Currently, the two most authoritative inspection agencies in the offshore engineering field are ABS in the United States and DNV in Norway, representing the forefront of international offshore engineering. These two countries are also at the forefront of offshore engineering development. These two classification societies account for a large portion of the offshore engineering projects under construction and in use worldwide, and the regulations of other classification societies are mostly built on their regulations. On the basis of these high standards, some European countries have formulated even higher and more specific regulations to protect the development of their domestic industries, such as the NORSOK standard (Norwegian National Oil Standardization Organization), which implicitly increases the procurement costs of China's offshore engineering projects.
　Regarding the "overseas risks" of offshore engineering construction. First, most of the owners of offshore engineering products are from Europe, which is a high-welfare country with long summer holidays, especially in July and August, when most factories are shut down, affecting procurement by domestic shipyards. The delivery time for outsourced equipment is generally long, and considering the difficulty in controlling the transportation process, there is a greater risk to project schedule control. Second, there are certain legal risks. Since most of the purchased equipment comes from foreign suppliers, there is a potential risk of legal disputes. Because international law applies, litigation is a long and arduous process for shipyards, with a very low win rate; third, force majeure in foreign procurement is also an important risk point in equipment procurement.
　The urgent need to build a domestic offshore engineering industry chain.
Energy security is the most important aspect of national strategic security, relating to both people's livelihood and the nation. Establishing a complete and reliable domestic offshore engineering supply chain can effectively guarantee energy security. Considering that China's offshore engineering industry is still in its infancy and lags far behind the world's advanced offshore engineering countries, it is necessary to forge a path of offshore engineering with Chinese characteristics: from simple to complex, from low-end to high-end, diligently learning advanced international experience, digesting and absorbing advanced international technologies, and striving to strengthen R\&D capabilities to develop its own products. The China Classification Society (CCS) should also formulate its own industry standards.