The non-Jones Act crane ship Thialf working on the topsides facility at Shell's Perdido platform in the U.S. Gulf of Mexico, 2009 (file image)

By Jon Waldron 03-11-2020 05:06:00

In December, after years of debate within the offshore industry, U.S. Customs and Border Protection (CBP) issued a decision in its Customs Bulletin entitled Modification and Revocation of Ruling Letters Relating to CBPs Application of the Jones Act to the Transportation of Certain Merchandise and Equipment Between Coastwise Points (the Decision). This decision became effective on February 17. So now the question arises - how does this actually affect offshore activities going forward?

In short, the notice eliminates previous erroneous decisions that allowed non-coastwise qualified vessels to transport items that should have been considered merchandise and not vessel equipment under the Jones Act. The notice also clarifies that lifting operations may be conducted by non-Jones Act vessels.

Specifically, as discussed in more detail below, the Decision (1) broadens the definition of merchandise to make it clear that non-Jones Act vessels can no longer carry out certain offshore activities that they have performed for years under an equipment of the vessel theory, and (2) establishes a new interpretation of Lifting Operations, to specify the movements that a non-Jones Act vessel can perform, when conducting installation or decommissioning operations, which will not be considered transportation within the meaning of the Jones Act.

Background

In both 2009 and 2017, CBP published notices to revoke or modify various rulings which potentially could have overturned decades of precedent with regard to a sweeping range of offshore operations which have never been subject to the Jones Act.To be frank, CBP did not fully understand how the offshore industry operated offshore, and the proposals were potentially over broad, without CBP understanding the economic impacts on the various types of offshore operations these proposals would have adversely affected.

As a result of strong industry backlash on both occasions, the proposals were withdrawn for reconsideration. Finally, following the 2017 withdrawal, CBP undertook an intensive exchange of information with all facets of industry to fully understand how industry actually operates offshore and to fine-tune and focus its 2019 proposal on the equipment of the vessel issues and lifting operations which resulted in this fair and well-balanced Decision.

The changes in the Decision will affect:

Vessel Equipment

For decades, CBP used a Mission of the Vessel concept to justify certain subsea installation, repair, and maintenance work. This concept was incorrectly applied over broadly, which allowed non-Jones Act vessels to perform some of these activities that should have been reserved to the Jones Act fleet. The Mission of the Vessel regime was revoked by the Decision and replaced with a new Vessel Equipment interpretation. Under this interpretation, the scope of vessel equipment was narrowed to include only items, which are necessary and appropriate for the navigation, operation, or maintenance of a vessel and for the comfort and safety of the persons on board.

CBP stressed that if an item is necessary and appropriate for the operation or maintenance of a vessel, it is considered vessel equipment. Items considered necessary and appropriate for the operation of the vessel are those items that are integral to the function of the vessel and are carried by the vessel. CBP also emphasizes that the fact that an item is returned to and departs with the vessel after an operation is completed, and is not left behind on the seabed, is a factor that weighs in favor of an item being classified as vessel equipment but is not the sole determinative factor. In addition, CBP determined that other historically used rationale using the terms foreseeability, incidental to an activity, de minimis, or unforeseen, can no longer be relied on to support an interpretation of vessel equipment.

Lifting Operations

Non-Jones Act vessels have been used for decades to perform lifting operations in the offshore sector. However, in a series of three rulings issued in 2012 and 2013, CBP ruled that a movement of a crane vessel off its central axis while a topside module is suspended from its crane - in order to avoid hitting the offshore facility before unlading the topside on it - is a violation of the Jones Act. The off-axis movement of the vessel was interpreted by CBP as providing part of the transportation of the topside between a point in the U.S. and the offshore facility. This created great confusionin the industry by making virtually any lifting operation a potential violation of the Jones Act.

As a result of its discussions with industry on this point, CBP made it a priority to clarify in its Decision that lifting operations are distinct from transportation within the meaning of the Jones Act. Accordingly, offshore lifting operations now include the lifting by cranes, winches, lifting beams, or other similar activities or operations, from the time that the lifting activity begins when unlading from a vessel or removing offshore facilities or subsea infrastructure until the time that the lifting activities can be safely terminated in relation to the unlading, installation, or removal of offshore facilities or subsea infrastructure.

CBP explained that offshore lifting operations are distinct from transportation in that any lateral movement of the vessel or the item in the vicinity of the structure or facility where the item is being positioned or removed is merely subordinate to and a direct consequence of the lifting operations. CBP reasoned that this interpretation was necessitated by safety and practical concerns, including the physical demands of the lifting operations, the mitigation of risk to human life and health, and the avoidance of damage to the marine environment. Importantly, CBP confirmed that this interpretation applies to all offshore lifting operations and is not limited to heavy lifts.

Pipelaying, Drilling Related Operations and Offshore Wind Energy Facilities

CBP specifically confirmed in its Decision that CBPs existing rulings on pipelaying and cable laying remain valid and are unaffected by its Decision. In addition, while not providing similar a statement with regard to drilling, it noted that drilling ruling letters previously identified for revocation pertaining to cement, chemicals, and other consumable materials will remain in force.Several comments sought clarification regarding the impact of the Decision on the development of offshore wind energy facilities. CBP responded that any future interpretations by CBP on the application of the Jones Act to wind energy facilities or other activities will be in response to ruling requests based on specific transactions. Accordingly, it remains prudent to assume that for the most part, until CBP issues future rulings, the Jones Act applies to wind projects in much the same manner as it applies to oil and gas projects.

Pending legislation

Meanwhile, as of the time of the writing of this article, Installation Vessel legislation is pending in Congress in the form of an amendment to the coastwise laws that would create a waiver procedure for certain lifting operations that could statutorily overturn the Decision with regard to Lifting Operations as discussed above. This provision is contained in the House passed version of the Coast Guard Authorization Act of 2019 (CGAA 2019). The Senate version of this bill is silent on this point. It is unclear what action (and when) Congress will act on this bill.

In conclusion, CBP should be commended for its hard work to reach this result and future offshore activities must be conducted in accordance with the Decision. Non-Jones Act vessels must now comply with a narrower definition of what constitutes vessel equipment not subject to the Jones Act. On the other hand, non-Jones Act vessels may conduct lifting operations in accordance with the Decisions new interpretation without fear of enforcement action, because such operations are not transportation subject to the Jones Act. However, industry must closely watch what action Congress ultimately takes on the Installation Vessel provision passed by the House to determine if the Decisions interpretation of Lifting Operations will be changed.

Jon Waldronis a partner in the Maritime and International Trade practice group at Blank Rome. Heserved in the U.S. Coast Guard for 20 years, attaining the rank of commander, and was senior counsel to the Marine Spill Response Corporation, where he provided on-scene legal advice at major spill events.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

See the rest here:

The Implications of CBP's Offshore Jones Act Changes - The Maritime Executive

At least one offshore wind turbine project will make landfall in Falmouth.

Representatives from Mayflower Wind Energy met with the Falmouth Board of Selectmen on Monday, March 9, to discuss its offshore wind project. Mayflower Wind is one of several energy providers leasing space in the Atlantic Coast Outer Continental Shelf, approximately 50 to 70 miles south of Cape Cod and 20 miles south of Nantucket.

We will have 80 to 100 wind turbines placed within a one-by-one-nautical-mile grid, said John Hartnett, president of Mayflower Wind Energy.

The project has the potential to supply 1.2 gigawatts of renewable wind energy for use by electricity customers within New England. Once constructed, the wind turbines will be connected to an offshore substation, which will connect to an onshore substation in Falmouth. The location of this substation has not been determined. This onshore substation will feed into a transmission station at Joint Base Cape Cod in Bourne.

When asked if the other energy providers are making landfall in Falmouth, Mr. Hartnett said no. Other providers have either not decided where their projects will make landfall or will be connecting to substations in Fall River or Barnstable.

Construction work is several years away.

The construction period is anticipated for 24, 25 and 26, Mr. Hartnett said. It will be at the end of 25 or early 26 before we generate power, assuming the permitting process goes as planned.

He said this project requires federal, state and local approvals, including approvals from the US Army Corps of Engineers, Bureau of Ocean Energy Management, US Coast Guard, Federal Aviation Administration, both the US and Massachusetts Environmental Protection agencies, and the Energy Facilities Siting Board.

He said the offshore wind energy project will provide low-cost energy, improve infrastructure and create 250 jobs. He also touted its green benefits.

Our project is vitally important to the climate crisis we are experiencing, Mr. Hartnett said.

He noted the group played a role in launching the Responsible Offshore Science Alliance, which will research and monitor fisheries and offshore wind interactions in federal and state waters.

We look forward to being a partner with the Town of Falmouth for the next 43 years, Mr. Hartnett said.

Selectman Susan L. Moran asked if information regarding the project was available online for the public to view. Mr. Hartnett referred people to Mayflower Winds website, http://www.mayflowerwind.com, for additional information.

Mayflower Wind is a joint venture between Shell and EDP Renewables.

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Planned Offshore Wind Turbines Will Have Connection To Shore Substation - CapeNews.net

Cyclone Gretel is tracking towards New Zealand today with clouds thickening over the North Island and soueast winds enhancing later in the day.

Latest reliable computer modelling continues to be in agreement that Gretel will remain a serious storm with the centre just offshore from northern New Zealand as it tracks by with about Category 1 or 2 strength.

The storm is powerful and will not be falling apart before NZ very much, instead high pressure in the Tasman Sea will guide it further east of Northland, significantly reducing the chances of severe weather here. The downside? It takes with it the chances of widespread soaking rains that in one go could have ended some droughts.

Eastern Northland has some rain chances and with still over 24 hours to go the computer models may pull the storm a little closer to NZ which could see some rainfall totals lift. But its worth noting even a very slight shift further out to sea will see more dry farms and gardens see 0mm forecast.

Winds will climb well over gale around Great Barrier Island, where power cuts may be possible on Tuesday. Isolated trees down are also possible out there. Strong winds between the storm and growing high pressure will see gales developing in Cook Strait and also around the eastern Bay of Plenty ranges where gusts could climb over 100km/h.

To make sense of this all, remember WeatherWatch.co.nz has 10 day forecasts for every location in NZ and these super local forecasts now comes with hourly wind speeds and hourly (& daily) rainfall totals.

THE MAPS:12 NOON TUESDAY (ECMWF)

GFS (AMERICA)

IBM / WEATHERWATCH:

JTWC:

WeatherWatch.co.nz

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Offshore Cyclone Gretel is a very close call for NZ, some severe weather risks (+10 Maps) - WeatherWatch.co.nz

A highlight of the UK offshore industrys social calendar has been postponed due to fears about the coronavirus spread.

The Offshore Achievement Awards were scheduled to take place at P&J Live in Aberdeen on March 19.

But the Society of Petroleum Engineers (SPE) Aberdeen Section, which organises and hosts the OAAs, has decided to reschedule the ceremony for September 10.

The organisation said: Following a series of discussions in recent days, we regret to inform you that organisers have made the decision to postpone this years Offshore Achievement Awards due to the coronavirus outbreak.

We have taken this decision based on closely monitoring advice from government, NHS Scotland and the World Health Organisation (WHO).

The ceremony was an evening we were all looking forward to, however we must ensure health and safety is our number one priority.

All table bookings will remain valid for the rescheduled ceremony on September 10th 2020.

We thank you for your understanding and are looking forward to seeing you all in September.

See original here:

Offshore Achievement Awards postponed due to virus fears - News for the Oil and Gas Sector - Energy Voice

]]> The Island Commander vessel will provide offshore services to Lundin for the next three years, under new contracts. Credit: Gunder Tande Sandersen/Island Offshore Group.

Norwegian offshore vessel owner Island Offshore has secured long-term contracts and extensions for six of its platform supply vessels (PSVs) offshore north-west Europe.

Lundin Norway, a subsidiary of Lundin Petroleum, awarded contracts for three vessels to work in Norwegian waters.

The company made a three-year deal for PSV Island Commander. This vessel will continue providing back-up for drilling at the Edvard Grieg complex in the Utsira High region of the North Sea.

Lundin contracted the LNG-fuelled Island Crusader and Island Contender for durations 600 and 400 days respectively. The two LNG vessels will start work between April and August this year.

The Island Crusader will support the semi-submersible West Bollsta for a ten-well drilling programme. Meanwhile the Island Contender will assist the jack-up Rowan Vikingin drilling seven wells.

Island Offshore Management managing director Tommy Walaunet said: We have not seen contracts of equivalent duration for quite some time now, which makes it extra pleasant to sign contracts for three vessels in one go.

This provides predictability for all our employees as well as a stable income for these vessels.

As well as the Lundin deals, Island Offshore won an extension of an existing contract with Team Marine. It has retained the PSV Island Champion for another year, operating out of Aberdeen.

Walaunet added: Both vessel and crew have delivered high-quality services for years with exceptionally good feedback from the customer. We are pleased and proud to have secured this extension for Island Champion.

These contracts provide a significant contribution to our order book and secures work places to our competent crew.

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Island Offshore wins long-term contracts for platform supply vessels - Offshore Technology

HeliService International has entered into long-term cooperation with the Japan-based Nakanihon Air Service for the Japanese offshore wind market.

According to HeliService, Nakanihon deems to offer helicopter offshore services in Japan and Asia as the offshore wind market is evolving in the region.

We are very pleased to have entered this deep co-operation with HeliService. With the extensive experience and expertise HeliService has in the Offshore Wind Market we regard them as our partner of choice, said Taku Shibata, President of Nakanihon Air Service.

Under the agreement, the German company will support Nakanihon in establishing offshore helicopter operations in Japan and beyond.

HeliService is honoured to support such a reputable company as Nakanihon. We are excited about the outlook in Japan and are looking forward to supporting Nakanihon in developing offshore helicopter operations, Oliver Freiland, Managing Partner at HeliService, said.

See the article here:

HeliService and Nakanihon Air Service Team Up for Japan's Offshore Wind - Offshore WIND

The US offshore wind industry along the Atlantic coast will invest as much as $57bn to install up to 30GW by 2030, and could support as many as 83,000 jobs by then, according to a new report by the American Wind Energy Association (AWEA).

Sector investment will deliver $5.5bn to $14.2bn per year in economic output by 2025 and $12.5bn to $25.4bn per year by 2030, the Washington, DC-based trade group said in its US Offshore Wind Power Economic Impact Assessment released Wednesday.

The AWEA report considers a base scenario of 20GW of operating offshore wind power by 2030 with annual 2GW deployment and domestic content increasing from 21% in 2025 to 45%. Project capital costs of $3,900/kW and annual O&M costs of $94/kW in 2025 would decline to $3,250/kW and $79/kW, respectively.

A high scenario, assumes 30GW of offshore wind is installed in 2030 with annual 3GW deployment and domestic content increasing from 32% in 2025 to 60% within five years. Project capital and annual O&M costs are the same as the base scenario.

Offshore wind is key to the future of clean energy development in the US and will add to a thriving wind power industry that already represents the largest source of renewable energy in the country, said AWEA CEO Tom Kiernan.

The five-turbine, 30MW Block Island array in Rhode Island state waters is the countrys only offshore wind facility. Now owned by Orsted, it came online in December 2016.

Since then, the states of Connecticut, Maryland, Massachusetts, New Jersey, New York, and Virginia have established targets to procure a total of 25.4GW of offshore wind capacity through 2035. They selected more than 6GW of projects as of February this year to help meet these goals.

Authors of the report note that the magnitude of economic benefits depends on three key inputs: annual offshore wind project capacity installations; domestic content of components and services required to develop, build, and operate projects and overall costs to develop them.

The domestic supply chains ability to support sector development is expected to increase over time as local manufacturers and service providers react to the new industry and global turbine OEMs look to invest in US factories, they wrote.

To date, project developers and suppliers have announced investments of $307m in port-related infrastructure, $650m in transmission infrastructure and $342m in US manufacturing facilities and supply chain development. Some of that investment awaits final corporate or regulatory approvals.

Lessons learned

The report highlights that history of the land-based wind industry in the US can provide important insights for how its offshore counterpart may grow. Thanks to technology improvements and cost reductions (and federal subsidy support), land-based wind capacity grew from 2.5GW in 2000 to more than 105.5GW at the end of 2019.

As wind farms spread across the country, so did wind-related jobs and manufacturing. In the early days, many products were imported from Europe and other global manufacturing centres. However, component manufacturers began investing heavily in domestic manufacturing facilities to serve the new, growing industry.

By 2007, 100 domestic facilities served land-based wind energy and more than 500 across 42 states manufacture parts today.

The growth of the offshore wind industry holds similar promise for US job growth, project construction and operations, and domestic manufacturing. It will also create new opportunities for port revitalisation and vessel construction, notes the report.

Even though early offshore wind projects will be concentrated along the East Coast, there is an opportunity for economic benefits to spread to other parts of the country, such as the Gulf Coast where jacket foundations were manufactured for Block Island, it adds.

AWEA estimates US offshore wind will require a diverse technical workforce spanning an estimated 74 occupations including crane operators, electricians, engineers, mechanics, offshore equipment and vessel operators, pipefitters and pile drivers.

The speed at which the industry builds projects and the degree to which manufacturing and supply chains migrate to the US will be key determinants of the industrys impact on economic output and job support. If the US offshore wind industry follows in the same general footsteps of land-based wind, the results will be significant, says the report.

AWEA's study comes as the sector hopes to gather momentum following the early setback of delays to the planned start-up of the first commercial-scale US offshore wind farm, the 800MW Vineyard project, which has been hit by permitting issues.

Continue reading here:

US offshore wind to spark jobs boom as sector invests up to $57bn: AWEA - Recharge

Cyclone Gretel was named overnight by Australian forecasters as it deepens over the Coral Sea.

The storm is not currently expected to make landfall anywhere but will brush New Caledonia, Norfolk Island and northern New Zealand.

While computer modelling usually shows storms moving in a line they do wobble a lot, meaning that although modelling today is even further in agreement that Gretel will likely remain just offshore, there is still that risk it could wobble closer our way at the last minute.

However, as weve said for a week now, the building high pressure zone in the Tasman Sea will be the guiding force for Gretel, with the high most likely protecting much of NZ. Severe weather with cyclones is usually within a few hundred kilometres of the centre of the low so if the storm stays more than a few hundred kilometres offshore so too does the severe weather. If the cyclone moves a little closer, the severe weather comes with it.

This cyclone is not a fizzer as New Zealanders often say when a storm doesnt hit them. In this case there is a serious storm with damaging hurricane force winds sliding past NZ, not falling apart before it gets here. Its like someone shooting a bow and arrow and it only slightly missing the target. Its still serious to be close to it as it comes towards us.

On Monday WeatherWatch will be able to fine tune if any severe weather will brush NZ. At this stage its still looking mainly offshore but that could change within the next 36 hours. There will be some pockets of severe weather as you can see in the maps below. You can also track tax funded MetService for warnings as the storm leaves Australias control on Monday.

While Gretel will be technically downgraded before it reaches the NZ area it will likely retain Category 1 or 2 equivalence as it narrowly tracks past Northland to the north east.

Gretel is currently producing 10 metre waves at sea and will make for dangerous marine and beach conditions in northern and north eastern New Zealand from Monday to Wednesday.

Gale force winds over 100km/h are most likely around the north eastern North Island (East Cape and Gisborne ranges, eastern Bay of Plentry). Watch for possible wind warnings.

With the storm likely to be offshore there is less rain expected in drought affected Northland. These totals may still change so refer to your local hourly and 10 day rainfall totals in your WeatherWatch forecast for more details over the coming days.

WHAT THE MODELLING SAYS FOR TUESDAY MORNING:GFS (America):

ECMWF (Europe):

BoM TRACKING:

JTWC (USA) TRACKING:

IBM / WeatherWatch maps:

WeatherWatch.co.nz

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Cyclone Gretel likely to brush northern NZ but should remain offshore (+12 Maps) - WeatherWatch.co.nz

MILAN , March 4, 2020 /CNW/ -- Prysmian Group, world leader in the energy and telecom cable systems industry, has been awarded a contract worth over 150 million by Rseau de Transport d'lectricit (RTE) for the development of two submarine and land export power cable systems to connect the offshore wind farm located in between the islandsof Yeu and Noirmoutier to the French mainland power grid.

Cable Enterprise vessel

The offshore wind farm is being developed by the company Les Eoliennes en Mer d'Ile d'Yeu et Noirmoutier which was awarded around 500 MW capacity production by the French government.RTE, the French transmission system operator appointed by the French government, will design, build, maintain and operate the two 225 kV links (submarine and land) to connect the offshore wind farm to the grid.The offshore wind grid connection project will be able to export 500 MW of green and renewable energy, covering a submarine cableroute of around 27 km and an underground cableroute of around 30 km.

Prysmian will provide its comprehensive turn-key approach for the design, supply, installation, and commissioning of two HVAC 225 kV three-core extruded export submarine cables with single-wire armouring which will reach the landfall area at La Barre-de-Monts beach. Prysmian will be also responsible for the supply and jointing of two HVAC 225 kV extruded land cables circuits that will link the landfall area to the substation at Soullans. Submarine cables will be produced at Prysmian's centres of excellence in Pikkala ( Finland ) and Arco Felice ( Italy ), while land cables will be manufactured in Gron ( France ). Installation operations will be performed bytheCable Enterprise, one of the three Group's state-of-the-art cable laying vessels.Delivery and commissioning are scheduled for 2023, conditional upon the receiving of the notice to proceed expected by March 2020 as regardthe preliminarystudies,and by June 2020 for the overall project.

"We are proud to be contributing tothe development of infrastructures of such great strategic importance," stated Hakan Ozmen , EVP, Projects Business Unit, Prysmian Group. "This contract not only consolidates our relationship with RTE,but also confirmsPrysmian's worldwideleadership in addressingthe increasing need for upgradedpower grids to support the energy transition,"concluded Ozmen.

Prysmian is already playing an important role in providing RTE or other customers with efficient and sustainable power transmission solutions, having recently been involved in key projects in France like Fcamp, Courseulles-sur-Mer and St. Nazaire offshore wind farms and the Provence Grand Large floating offshore wind farm (awarded by EDF Renewables), in addition tothe IFA2 interconnection linking the UKand France , the Piedmont -Savoy interconnection betweenItaly and France,and the INELFE interconnection linking Spain (Santa Llogaia) and France (Baixas).

Prysmian Group

Prysmian Group is world leader in the energy and telecom cable systems industry. With almost 140 years of experience, sales exceeding 11 billion, about 29,000 employees in over 50 countries and 112 plants, the Group is strongly positioned in high-tech markets and offers the widest possible range of products, services, technologies and know-how. It operates in the businesses of underground and submarine cables and systems for power transmission and distribution, of special cables for applications in many different industries and of medium and low voltage cables for the construction and infrastructure sectors. For the telecommunications industry, the Group manufactures cables and accessories for voice, video and data transmission, offering a comprehensive range of optical fibres, optical and copper cables and connectivity systems. Prysmian is a public company, listed on the Italian Stock Exchange in the FTSE MIB index.

Story continues

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Prysmian Secures Over 150 Million Offshore Wind Grid Connection Project in France by RTE - Yahoo Finance

Where will investors in offshore oil and gas look as the energy transition starts to take hold?

While the oil and gas sector remains the largest component of the offshore supply chain, we expect the offshore wind market to become more attractive for traditional oil and gas players.

There is limited crossover today, but first movers have gone with the wind and more will soon follow. As interest and investment in offshore wind grow, investment in offshore oil and gas is likely to stabilize, narrowing the gap between the two sectors. Despite a 29 percentdrop in the average global capex per megawatt a measure of the investment per megawatt generated we forecast in a new reportthat more than $200 billion in capex will be deployed in offshore wind between 2020 and 2025.

How do offshore oil and gas and offshore wind compare for investors? Here are three factors to consider.

The transparency and certainty of offshore wind arehigh because deployment is largely tied to government incentives. In fact, 82 percentof the forecast offshore capacity to 2025 has been awarded funding under a support scheme or is in the more advanced stages of development.

Compare that to global offshore upstream oil and gas capex, where the current trend for short-cycle projects lowers the visibility and certainty of investment outlooks beyond 2022.

Offshore wind projects are changing; the offshore wind supply chain will have to change with it. The number of project interfaces the supply deals associated with a project is both broadening and decreasing, while the size of projects and contracts is growing.

Project sizes and clusters of projects will increase by 63 percentby 2025. To win these larger deals, smaller supply chain players are consolidated to create companies capable of capturing the larger work packages. Moreover, the larger work packages are also attracting the larger O&G players to the offshore wind industry.

Meanwhile, changes in project characteristics (scale, complexity, water depth and distance from shore) impactthe way capex is distributed along the value chain and intensifyrequirements forequipment and production capabilities.

Investors follow the money. That was the lure of U.S. tight oil, which offeredaverage project returns of around 30 percent. And even at $55-$60per barrel of oil, most new offshore oil and gas projects are making double-digit-percentreturns. Sowhy would an investor instead choose an offshore wind project with single-digit returns?

Theres more work to do to make renewables projects attractive, even economic, to mainstream investors. Butany investment in the oil and gas sector is now subject to what's termed energy transition risk,which encompasses falling demand for oil, the potential cost of the carbon intensity of assetsand other variables.

Theres also a real possibility that both upstream project returns and renewables project returns will evolve, taking into account the changing cost of capital, government subsidies and technology development. In the context of the energy transition, we expect offshore wind to become an attractive low-risk investment, particularly to carbon-heavy portfolios.

Offshore wind isnt a deepwater game yet. Today most activity is clustered on the offshore shelves around Europe, China and South Asia, with North America catching up.

Whats attractedthe attention of many oil and gas investors is the large potential of offshore wind and the fact that the wind developments are sited in mature, well-established upstream areas they already know well.

Its conceivable that there will be a point of convergence in those regions in the 2020s where offshore wind investment will match oil and gas.

***

Sren Lassen is asenior offshore wind analystandMhairidh Evans isa principal upstream supply chain analyst at Wood Mackenzie.

Lassen's latest report,The 200bn prize in offshore wind, is available here.

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Offshore Wind to Attract More Than $200B Between 2020 and 2025 - Greentech Media News

Danish offshore wind champion Orsted has increased its full-year guidance for earnings before interest, taxes, depreciation and amortisation (Ebitda) by DKr1bn ($149m) to DKr16-17bn in 2020 on updated assumptions regarding the divestment of the transmission asset for Hornsea 1.

orsted in 2019 had commissioned Hornsea 1, so far the worlds largest offshore wind farm, with a capacity of 1.2GW.

For offshore wind farms in the UK, the utility constructs and subsequently divests its transmission asset, which is a regulatory requirement and is conducted in a process led by Ofgem, the UK regulatory authority for gas and electricity markets.

Following further progress in the divestment process, we have lowered our assumption regarding the preferred bidders expected return requirement on the transmission asset, rsted said in a press release.

The implication of this is twofold. A positive NPV impact on our own share of the transmission asset, as we will be paying lower than assumed tariffs going forward, and higher profit on the 50% share of the transmission asset we divest on behalf of our partner.

The impact of the latter will be recognised in EBITDA in 2020, whereas the EBITDA impact on Orsteds own share of the asset will materialise over the lifetime of the asset, the company added.

Asked by Recharge, whether possible future impacts by the spread of the Coronavirus could impact its business performance this year, Orsted said its business so far is unaffected by the situation.

But of course we are closely monitoring the situation, and we have implemented precautionary measures in all our offices, based on the advice given by the authorities in the countries we operate in, our travel security collaboration partner, and the health and precaution guidelines issued by WHO, the company said in a statement.

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Orsted raises guidance on UK offshore wind transmission divestment - Recharge

Videos and text by TIM FAULKNER/ecoRI News staff

PROVIDENCE A new glass-and-steel office space is less about the number jobs or the company that will occupy it and more about the industry taking root there.

Seven co-working desks at the Wexford Innovation Center on Dyer Street in the Jewelry District will soon be used by rsted U.S. Offshore Wind. The Danish company is joining seven other wind-related companies already there. And judging by the 200 or so attendees at the March 2 office opening, a nascent industry is on the verge of rapid growth.

This is a brand-new industry and it's being born right here in the state of Rhode Island. Its unbelievable, Gov. Gina Raimondo said.

Twenty-two gigawatts of wind facilities are planned for federal waters between Maine and North Carolina, and undoubtedly a lot of engineers, tradespeople, boatbuilders, and more will be needed to get the turbines built and spinning.

Other port cities such as Boston, where rsted has its co-headquarters, New Bedford, Mass., and Norfolk, Va., are vying for the title of U.S. capital of offshore wind. But these is little doubt that Providence is part of the emerging blue economy. rsted, which bought Deepwater Wind in 2018, is still using its original downtown office on Exchange Terrace, where it has already doubled its staff from 30 to 60. More will work at the innovation hub on Dyer Street, where employees from Denmark and other offices will hold meetings with offshore wind entrepreneurs.

With its sweeping view of the East Side and nearby mill buildings, the Wexford complex is prime real estate. In less than a year, some 80 businesses are occupying suites or sharing office amenities. The pubic-private venture is steps from the new riverfront park and pedestrian bridge, and with the help of state tax incentives, the new, modern office building has drawn partners such as the Cambridge Innovation Center and Brown University and its medical science programs.

Incentives have also brought in tenants such as Johnson & Johnson and seven wind-energy companies that include GEV, Boston Energy, Glosten, and Harbor Light Software.

Ladies and gentlemen, its happening, Commerce Secretary Stefan Pryor said. This place is, thankfully, really humming.

Pryor quoted a state economic report showing that the offshore wind sector will create between 20,000 and 35,000 jobs along the East Coast by 2028. Rhode Island is already developing the jobs through wind companies and educational programs at the University of Rhode Island and other institutions.

Link:

Offshore Wind Takes Shape at Providence Innovation Hub - ecoRI news

Offshore wind will attract capital expenditure (Capex) of $211bn (189bn) between 2020 and 2025, according to new research by Wood Mackenzie.

The researchers said investors traditionally targeting the oil and gas sector will find offshore wind increasingly attractive, helping to drive Capex.

There is limited crossover today, but first movers have gone with the wind and more will soon follow, Wood Mackenzie said.

It said offshore wind investments offer greater certainty and transparency because deployment is largely tied to government incentives.

About 82% of the forecast offshore capacity to 2025 has been awarded a support scheme or is in more advanced stages of development, the research said.

This compares with global offshore upstream oil and gas Capex, where the current trend for short-cycle projects lowers the visibility and certainty of investment outlooks beyond 2022, it said.

Wood Mackenzie added that the offshore wind supply chain is also entering a period of transformative growth.

The number of project interfaces the supply deals associated with a project is both broadening and decreasing, while the size of projects and contracts is growing, the analysts said.

They added that project sizes and clusters of projects will increase by 63% by 2025.

To win these larger deals, smaller supply chain players are consolidated to create companies capable of capturing the larger work packages, Wood Mackenzie said.

It added that larger work packages are also attracting the larger O&G players to the offshore wind industry.

Changes in project characteristics the scale, complexity, water depth and distance from shore is also changing the way in which Capex is distributed along the value chain and intensifies requirements to equipment and production capabilities, the researchers said.

They added that offshore wind offers lower risk and lower returns and investors 'follow the money'.

But why would investors target offshore wind with single-digit returns, when most new offshore oil and gas projects are making double-digit returns? asked Wood Mackenzie.

It said: Theres more work to do to make renewables projects attractive, even economic, to the mainstream of investors.

But, any investment in the oil and gas sector is now subject to 'energy transition risk', which encompasses falling demand for oil, the potential cost of the carbon intensity of assets, and more.

Theres also a real possibility that both upstream project returns and renewables project returns will evolve, taking into account changing cost of capital, government subsidies and technology development.

In the context of the energy transition, we expect offshore wind to become an attractive low-risk investment, particularly to carbon-heavy portfolios.

The rest is here:

Offshore wind to 'attract $211bn up to 2025' - reNEWS

Offshore wind farms in Belgium broke a record in February as they produced 804GWh of electricity, according to the Belgian Offshore Platform (BOP).

The 804GWh, measured at the Elia grid connection point, corresponds to the annual consumption of 230,000 households, at 3,500kWh per year per family.

The last reported monthly record was in December 2019 when the countrys six wind farms generated 616GWh of electricity.

According to BOP, the new record is due to a higher installed capacity, which was increased in February by 60MW, from 1556MW to1616MW.

This increase is due to the commissioning of the first turbines at the Northwester 2 offshore wind farm.

Compared to February 2019, installed capacity increased by 430MW, or 36.5%, 370MW for the Norther project and 60MW for Northwester 2.

Additionally, it was a record month in terms of wind conditions, as the average capacity factor was 74%, compared to the previous record of 70% from December 2015.

Over the last five years,the average capacity factor for February was 53%, BOP said.

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Belgian Offshore Wind Farms Smash Production Record - Offshore WIND

The UK may need to build floating wind farms at a faster pace and greater scale than expected as fixed-foundation offshore turbines in the North Sea start hitting more obstacles such as adverse environmental impacts, said the British government as it unveiled plans to include the fast-emerging technology in future renewable energy auctions.

Floating wind is for the first time being considered for inclusion in the next round of contract-for-difference (CfD) auctions for a government-backed power deal scheduled for 2021, either competing directly against fixed-foundation projects or in a separate pot depending on the outcome of a consultation.

The prospect of floating projects competing for CfD deals in the worlds biggest offshore wind market is a big step forward for the technology, which the UKs Department of Business, Energy and Industrial Strategy (DBEIS) said could be needed sooner than thought if fixed-bottom starts running into problems in meeting the countrys burgeoning offshore wind ambitions.

With the significantly higher levels of deployment needed to 2050 to meet [the UK's plans for] net zero it makes sense to consider the risk of cumulative impacts (environmental, radar interference, conflicting uses of the sea for example) which could increasingly affect the ability for fixed bottom wind deployment to be realised, said DBEIS.

Should such risks materialise it is likely that the commercial deployment of floating offshore wind will be needed sooner than previously anticipated and at greater levels, particularly during the 2030s.

The UK has a target for 40GW of offshore wind deployment by 2030, raised from 30GW under the sector deal agreed with the industry last year and a current installed base of 8.5GW.

But environmental challenges and local discontent about onshore works are already starting to impinge on massive projects underway off eastern England.

DBEIS said floating wind farms could help with its ability to deploy in deeper waters of 60-metres or more further from shore, and potentially open for development new areas off Scotland, Wales and southwest England that are currently outside the mainstream of UK offshore wind development in the North Sea: It may allow offshore wind generation that is decoupled from the weather patterns in the North Sea to provide some insulation against the effects of intermittency on the grid.

However, floating wind's cost-of-energy profile is still far higher than fixed-foundation projects that have driven down their prices steeply in previous UK CfD auctions.

Given the still relatively early stage of development of the floating offshore wind sector it may be necessary to consider introducing measures over the coming years to encourage early deployment and cost reduction.

This would allow larger scale deployment to begin during the 2030s without a deployment hiatus which could jeopardise maintaining our decarbonisation trajectory and at lower cost than would otherwise be possible, said DBEIS officials.

Bruno Geschier, chief sales and marketing officer at technology pioneer Ideol, and co-chair of the Floating Offshore Wind Committee recently set up by industry body World Forum Offshore Wind (WFO) said: We can see this as a positive signal that floating wind is finally being acknowledged as an important part of the future renewable energy mix, while reserving full judgement until DBEIS makes its final decisions.

WFO managing director Gunnar Herzig said: This is excellent news for floating offshore wind. The UK is ideally positioned to lead the commercial-scale rollout of floating offshore wind and should therefore support floating wind separately from bottom-fixed offshore wind.

WFOs newly created Floating Offshore Wind Committee is going to proactively support the UK and its industry in becoming a global leader in floating wind.

The UK is already home to the worlds first commercial-scale floating wind farm, Equinors 30MW Hywind Scotland, with other early-stage deployments underway off Scotland Flotation Energys market-leading 50MW Kincardine where a scout turbine was switched-on in 2018, as well as France and Portugal.

Though Europe, with over half of the total global floating wind capacity installed and expectations for some 320MW off its coasts by 2021 , is the current market pace-setter, Asian plays in Japan and Korea, as well as the US Pacific, have recently heaved into view with international-scale ambitions, with California most recently seeing set-up of a coalition that is calling on the state government to support construction of 10GW of floating wind by 2045.

Equinor set out a road map in 2017, when it brought Hywind online, which forecast 12-15GW of moored units turning by 2030 at a levellised cost of energy of 40-60/MWh ($43-55/MWh), the current price of conventional offshore wind power.

Equinor head of floating wind development Sebastian Bringsvrd told Recharge: We believe this is an important first step for floating offshore wind in the UK. It is a recognition that floating offshore wind will be needed to meet UKs net-zero target. We agree with the assessment that floating offshore wind initially should be treated differently from fixed-bottom offshore wind in the CfD allocation process.

However, while Equinor agrees that the largest floating wind roll-out will be from the 2030s, we are of the opinion that there are benefits of an early deployment of floating offshore wind (i.e. in the latter part of the 2020s) to ensure the necessary cost reduction and to capture the industrial benefits from being an early mover.

The World Bank in a recent report suggests floating wind power could swiftly take up a leading role in the energy production mix of many national markets, spotlighting markets including Brazil, India, Morocco, the Philippines, South Africa, Sri Lanka, Turkey and Vietnam as having the potential to add over 2TW in the global fleet in the coming decades.

Note: Update adds quotes and details

See the article here:

UK may need faster floating wind build as North Sea offshore hits the wall: officials - Recharge

CAPE TOWN (Reuters) - Somalia has agreed an initial roadmap with a Shell/Exxon joint venture to explore and develop potential offshore oil and gas reserves, the Ministry of Petroleum and Mineral Resources said on Monday.

I am delighted we have agreed an initial roadmap with the Shell/Exxon joint venture. This gives us confidence in (the)ability to further explore any offshore hydrocarbon potential, minister Abdirashid Mohamed Ahmed said in a statement.

Last month Somali President Mohamed Abdullahi Farmajo signed petroleum legislation into law to help open up a new frontier market in Africa as the strife-torn country hopes new petroleum finds will help transform its economy.

Seismic data suggests there could be significant oil reserves offshore.

In October Shell and Mobil, which had a joint venture on five offshore blocks in Somalia prior to the toppling of dictator Mohamed Siad Barre in the early 1990s, agreed to pay the government $1.7 million for historic leasing of the blocks.

Exxon Mobil and Shell were not immediately available to comment.

Reporting by Wendell Roelf; editing by David Evans

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Somalia agrees offshore oil exploration roadmap with Shell/Exxon: minister - Reuters

NEW YORK, March 3, 2020 /PRNewswire/ --

Global Offshore Patrol Vessel Market 2020-2024The analyst has been monitoring the global offshore patrol vessel market and it is poised to grow by USD 4.91 bn during 2020-2024, progressing at a CAGR of 4% during the forecast period. Our reports on global offshore patrol vessel market provides a holistic analysis, market size and forecast, trends, growth drivers, and challenges, as well as vendor analysis covering around 25 vendors.

Read the full report: https://www.reportlinker.com/p02779362/?utm_source=PRN

The report offers an up-to-date analysis regarding the current global market scenario, latest trends and drivers, and the overall market environment. The market is driven by increasing need to control drug trafficking.In addition, melting arctic ice increasing maritime activities is anticipated to boost the growth of the global offshore patrol vessel market as well.

Market SegmentationThe global offshore patrol vessel market is segmented as below:Product:o Basic OPVs

o High-end OPVs

Geographic Segmentation:o APAC

o Europe

o MEA

o North America

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Key Trends for global offshore patrol vessel market growthThis study identifies melting arctic ice increasing maritime activities as the prime reasons driving the global offshore patrol vessel market growth during the next few years.

Prominent vendors in global offshore patrol vessel marketWe provide a detailed analysis of around 25 vendors operating in the global offshore patrol vessel market, including some of the vendors such as Austal Ltd., BAE Systems Plc, Damen Shipyards Group NV, Fincantieri Spa, Fr. Fassmer GmbH & Co. KG, Fr. Lrssen Werft GmbH & Co. KG, Mitsubishi Heavy Industries Ltd., Naval Group SA, NAVANTIA SA and Saab AB .The study was conducted using an objective combination of primary and secondary information including inputs from key participants in the industry. The report contains a comprehensive market and vendor landscape in addition to an analysis of the key vendors.

Read the full report: https://www.reportlinker.com/p02779362/?utm_source=PRN

About ReportlinkerReportLinker is an award-winning market research solution. Reportlinker finds and organizes the latest industry data so you get all the market research you need - instantly, in one place.

__________________________Contact Clare: clare@reportlinker.comUS: (339)-368-6001Intl: +1 339-368-6001

Continued here:

The Global Offshore Patrol Vessel MARKET is expected to grow by USD 4.91 bn during 2020-2024, progressing at a CAGR of 4% during the forecast period -...

The piles were designed to contend with a complex and varied seabed geology. DEME Offshores specialist installation vessel Apollo was then brought in to carefully drive each of the 309 piles into place within strict positional and vertical tolerances. This highly precise operation was achieved through the use of innovative pile engineering and the development of a patented piling template, designed to integrate with the jack-up legs of Apollo.

DEME Offshore also developed a special underwater drilling tool to cope with hard and rocky layers and relief drilling to install the piles in these challenging conditions.

The company was supported by the services of a number of specialist UK companies, particularly those which conducted heavy fabrication works at Arnish and Methil, and those that provided onshore logistical services via facilities at Invergordon.

The second stage of offshore works will see DEME Offshores newbuild, next generation offshore installation vessel Orion integrate 103 jacket foundation structures and three topside modules with the pin piles now in place.

This major project milestone highlights our technical expertise whereby we are delivering innovative solutions for the most challenging projects in the offshore wind industry said Bart De Poorter, General Manager DEME Offshore. We would like to thank our partners and stakeholders in this project for the successful collaboration. Our teams will now fully focus on the preparation of the installation of the foundations, which will be the very first project for our giant new offshore installation vessel Orion.

For additional information:

DEME Group

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Wind - Foundation piling operations completed at Moray East Offshore Wind Farm - Renewable Energy Magazine

Unfortunately for some shareholders, the W&T Offshore (NYSE:WTI) share price has dived 37% in the last thirty days. That drop has capped off a tough year for shareholders, with the share price down 52% in that time.

Assuming nothing else has changed, a lower share price makes a stock more attractive to potential buyers. In the long term, share prices tend to follow earnings per share, but in the short term prices bounce around in response to short term factors (which are not always obvious). The implication here is that long term investors have an opportunity when expectations of a company are too low. Perhaps the simplest way to get a read on investors' expectations of a business is to look at its Price to Earnings Ratio (PE Ratio). Investors have optimistic expectations of companies with higher P/E ratios, compared to companies with lower P/E ratios.

View our latest analysis for W&T Offshore

We can tell from its P/E ratio of 1.85 that sentiment around W&T Offshore isn't particularly high. We can see in the image below that the average P/E (10.1) for companies in the oil and gas industry is higher than W&T Offshore's P/E.

NYSE:WTI Price Estimation Relative to Market, March 2nd 2020

Its relatively low P/E ratio indicates that W&T Offshore shareholders think it will struggle to do as well as other companies in its industry classification. Many investors like to buy stocks when the market is pessimistic about their prospects. It is arguably worth checking if insiders are buying shares, because that might imply they believe the stock is undervalued.

Generally speaking the rate of earnings growth has a profound impact on a company's P/E multiple. Earnings growth means that in the future the 'E' will be higher. Therefore, even if you pay a high multiple of earnings now, that multiple will become lower in the future. Then, a lower P/E should attract more buyers, pushing the share price up.

In the last year, W&T Offshore grew EPS like Taylor Swift grew her fan base back in 2010; the 52% gain was both fast and well deserved. The cherry on top is that the five year growth rate was an impressive 61% per year. With that kind of growth rate we would generally expect a high P/E ratio.

The 'Price' in P/E reflects the market capitalization of the company. In other words, it does not consider any debt or cash that the company may have on the balance sheet. The exact same company would hypothetically deserve a higher P/E ratio if it had a strong balance sheet, than if it had a weak one with lots of debt, because a cashed up company can spend on growth.

Spending on growth might be good or bad a few years later, but the point is that the P/E ratio does not account for the option (or lack thereof).

W&T Offshore has net debt worth a very significant 185% of its market capitalization. If you want to compare its P/E ratio to other companies, you must keep in mind that these debt levels would usually warrant a relatively low P/E.

W&T Offshore trades on a P/E ratio of 1.9, which is below the US market average of 16.5. The company has a meaningful amount of debt on the balance sheet, but that should not eclipse the solid earnings growth. If the company can continue to grow earnings, then the current P/E may be unjustifiably low. What can be absolutely certain is that the market has become more pessimistic about W&T Offshore over the last month, with the P/E ratio falling from 2.9 back then to 1.9 today. For those who prefer to invest with the flow of momentum, that might be a bad sign, but for deep value investors this stock might justify some research.

Story continues

Investors should be looking to buy stocks that the market is wrong about. As value investor Benjamin Graham famously said, 'In the short run, the market is a voting machine but in the long run, it is a weighing machine. So this free visualization of the analyst consensus on future earnings could help you make the right decision about whether to buy, sell, or hold.

But note: W&T Offshore may not be the best stock to buy. So take a peek at this free list of interesting companies with strong recent earnings growth (and a P/E ratio below 20).

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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What Is W&T Offshore's (NYSE:WTI) P/E Ratio After Its Share Price Tanked? - Yahoo Finance

BERGEN, Norway -- Norways SalMar, which already has one substantial offshore pilot salmon-farming project, has plans to begin construction of its second, larger, facility this summer, according to chairman Atle Eide.

The Smart Fishfarm, a much bigger oil-rig scale offshore emplacement, will be a follow up to SalMars pilot Ocean Farm 1 project, on a scale almost twice the size.

Compared to Ocean Farm 1, this is a true offshore construction, Eide told listeners at the North Atlantic Seafood Forum in Bergen. Ocean Farm 1 could take waves up to 11 meters, but Smart Fishfarm will go 30-40km off the coast, and operate in waves up to 31m high.

And as you see, its a huge construction, 70m high, and it will hold between 3-4 million salmon, and we will produce between 17,000-20,000t of salmon in these farms. And we do hope that we will make the decision to build this farm just after the summer, we are now finalizing the design.

The center of the Smart Fishfarm will be 40 meters in diameter, and contain an area for treating sea lice and diseases should we have them.

Eide noted that the window for operations in harsh conditions is significantly smaller than in coastal aquaculture, especially in winter months, meaning specialized planning will be needed for harvesting and restocking.

Likewise, wellboats and feed vessels on a whole new scale will be necessary to service the farm, given the size of the waves expected.

This farm will be eight chambers compared to the first one which is five; and if we can solve all of these potential problems, the first harvest will be the spring of 2024. So by that time we will need to partner up with those who can offer these logistical solutions.

Likewise, cleaner fish will not be possible to use so far out to sea, so SalMar will also be testing how effectively its design prevents the build-up of sea lice.

We are paying a lot of attention to the effect of the conditions on the smolt, so we will be putting fairly large smolt to sea, Eide said. The first farm is a pilot, we will do a lot of testing and run with less intensity than we will hopefully be able to do later.

Eide told listeners that an estimated investment in the region of NOK 200 billion ($21bn) will be required to grow Norwegian offshore aquaculture to its full potential in the next three decades.

The goal, Eide said, was to grow Norwegian aquacultures total production to five million metric tons of salmon by 2050, but production growth had slowed in the past few years as the industry is held back by salmon escapes and sea lice issues, slowing the approval of new farming licenses.

However, Eide noted that currently, only 0.03% of Norways coastline is used for aquaculture, and growing from current production levels of 1.35 million metric tons to 5m metric tons would still only require less than 0.1% of Norwegian coastal space.

Enormous investments would be required to achieve this growth, not seen since the heyday of the oil and gas industry, Eide told listeners. We should exploit the huge offshore areas available; if 70% of the growth comes from offshore from 2030, the industry will need to invest over NOK 200bn in offshore production.

By growing to that 5m metric ton figure, Eide also believes the industry would create up to 127,000 new jobs, employing workers taken from Norways declining oil and gas trade.

And then, in addition, we need a whole new generation of wellboats and feedboats, plus more capacity in operations and maintenance.

But he warned that this growth is only going to be possible if the industry proves it can resolve its disease issues, allowing for the high-intensity offshore farming that SalMar and many other farmers desire.

Thats why were encouraging all companies that are working on those issues, and Im convinced by the competence within the industry that these issues will be solved, Eide said. The message from the government is quite clear: if you do not solve these issues you will not be allowed to grow.

Contact the author [emailprotected]

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SalMar hopes to begin construction of 'ultimate offshore farm' this summer - Undercurrent News