Category Archives: Offshore

New York Times

Offshore Money, Bane of Democracy New York Times The government recently granted FinCEN authority to peek behind the veil of secrecy provided by offshore shell companies, and what the bureau has seen is disturbing: There is a flood of dirty capital pouring into United States real estate, and it isn't ...

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Offshore Money, Bane of Democracy - New York Times

4/7/2017

LONDON -- Alpha Petroleum Resources Limited, an upstream oil and gas operator focused on the UK sector of the North Sea and backed by private equity firm Petroleum Equity, has entered into a Front-End Engineering and Design (FEED) study agreement with Teekay Offshore Partners L.P. for its Varg Floating Production Storage and Offloading (FPSO) unit. Alpha intends to use the FPSO for the development of Cheviot oil field. Cheviot is 100% owned by Alpha Petroleum and is one of the largest undeveloped oil fields in the UK sector of the North Sea.

Source: Teekay Offshore.

Alpha has also entered into an Exclusivity Agreement with Teekay Offshore and during FEED will negotiate a Lease and Operate contract for the entire expected life of Cheviot oil field. Alpha expects to achieve sanction for the development during third-quarter 2017 and is targeting first oil production in 2019 at an expected rate of at least 30,000 bpd.

The Cheviot development program will consist of a minimum of 18 wells: 13 production wells, two water injection wells and two gas injection wells. It also includes one production well established in the satellite Peel oil reservoir. Options exist to use additional processing capacity on the Varg FPSO, which will be considered during the FEED process. This would allow for infill wells to increase ultimate recovery. Development of Cheviot field is predicated upon rigorous evaluation of historical production data and new 3D seismic surveys. Alpha Petroleum has concluded that maximum recovery would be achieved via re-injection of produced gas and water and use of horizontal wells to minimize drawdown.

Andy Crouch, Alpha Petroleums executive chairman, commented: This is a key milestone in the development of Cheviot field and follows innovative thinking and continued investment during a downturn in the market. Teekay Offshore has a strong track record of operational excellence in the North Sea, and we are very pleased to see their commitment to this project.

Alphas collaborative approach with contractors has resulted in a project that is economically robust in a low oil price environment, minimizes our delivery risk and time to first oil and meets the UK Governments MER requirements. We are focused on creating long-term value by bringing Cheviot to production and building a hub around Cheviot field to unlock further upside in nearby undeveloped discoveries.

Teekay Offshores Varg FPSO was selected for its ability to meet all of the projects requirements, which include minimal Cheviot-specific modifications; minimal FPSO work to meet the anticipated 10-year project life; and being a proven, reliable North Sea FPSO Varg has an average 98% availability record.

Alpha Petroleum is backed by Petroleum Equity, an alternative investment firm established in 2012 to address the significant lack of alternative capital providers focused on upstream oil & gas investment opportunities outside North America. Petroleum Equitys senior industry team has deep and specialist expertise in oil & gas investments, with an average of 27 years experience in the sector.

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Alpha Petroleum enters into FEED study agreement for Teekay ... - WorldOil (subscription)

An undated supplied image from Amnesty International shows children at the Australian-run detention centre on the Pacific island nation of Nauru. Photograph: Handout/Reuters

Controversies over abuses in Australias offshore detention regime could harm its multimillion-dollar bid for a seat on the UNs Human Rights Council.

Nauru whistleblowers have told a global womens event in New York that Australia should be blocked from winning a seat on the influential UN body, because of systemic physical and sexual abuse in the island camps, and the international law violations of its indefinite detention regime.

Speaking at the Women in the World conference in New York between the Scottish first minister, Nicola Sturgeon, and the former US presidential candidate Hillary Clinton Nauru whistleblowers Viktoria Vibhakar and Alanna Maycock detailed abuses they witnessed in the camps and said Australias attempt to secure a seat on the council was inconsistent with running an offshore detention regime.

The Australian government could demonstrate its respect for human rights by evacuating these camps and bringing people to safety, Vibhakar said. If they were to do so, we would all applaud and support their bid. But this [human rights] council is supposed to protect and promote the very same human rights laws that Australian governments detention camps so flagrantly violate.

I have seen the human rights violations myself, I have given hundreds of documents recording abuse to inquiries the government cannot say it is unaware of the harm being perpetrated against people in these camps.

How can Australias bid be taken seriously in the face of such ongoing and unlawful treatment of vulnerable people?

Jennifer Robinson, Australian human rights lawyer and co-founder of the Hakawati Project, said Australias offshore detention regime had already been criticised by the council. But she said Australia was acutely sensitive to international pressure, especially as the council vote approached.

I think theres hope for change Australia reacts to international pressure.

At the councils universal periodic review of Australia in 2015, when more than 100 countries commented on the countrys human rights record, many were critical of offshore detention.

Other arms of the UN, including the special rapporteur on the human rights of migrants, and the UN committee against torture, have criticised offshore detention as unlawful.

Australia will compete with Spain and France for two seats on the council in elections in November. The successful nations will earn a seat on the 47-member council for three years from 2018. Australia has a solid chance of being elected, particularly given no country from the Pacific has ever sat on the council.

Lobbying for a seat in a speech to the council in February, the minister for international development and the Pacific, Concetta Fierravanti-Wells, said Australias bid for a council seat, its first, reflected a commitment to advance human rights.

It is more important than ever for nations like Australia to ensure that human rights remain a fundamental pillar of our foreign policy and global outreach.

We see holding a seat on the council as bearing a significant responsibility: a responsibility to work with partners to address international human rights violations; to stand up for universal values globally and in Australia; and to hold those responsible for violations to account especially in grave situations of human rights abuses, such as North Korea and Syria.

Fierravanti-Wells said Australia would promote the empowerment of women and girls, as well as freedom of expression, good governance, the rights of Indigenous people and strong national human rights institutions.

The council is not without controversy. Current members include Egypt, China, Cuba and Saudi Arabia, all countries with their own human rights abuses including extrajudicial executions, arbitrary imprisonment and restrictions on freedoms of association, religion and speech.

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Offshore detention may hurt Australia's bid for UN Human Rights Council seat - The Guardian

Editors note: The brochure from which this post was drawn, is a compilation of 10 recent and brief news items covering the logistics development in the offshore wind industry.

Walking to work across a gangway has become commonplace for technicians in the offshore oil and gas and offshore wind industries. Early, first generation systems provided the ability to transfer personnel from vessels to a fixed structure, but a new generation of walk-to-work technology has recently been introduced that enables technicians and their equipment to be transferred from a suitably sized vessel directly to an offshore platform, wind turbine or other offshore structure, such as a substation.

The first of two specialized roll-on/roll-off (ro-ro) vessels commissioned by Siemens for transporting nacelles, tower sections, and rotor blades was launched in the Danish port of Esbjerg December 2016. We are stepping into a new era of cost-efficient offshore wind logistics, said the companys offshore CEO, Michael Hannibal.

Statoil secures logistics support for offshore wind farm Statoil has awarded Peterson two long-term contracts to provide logistics support for the Dudgeon offshore wind farm in the southern North Sea. Peterson will deliver comprehensive logistics services including stevedoring, ship agency services, provisions delivery, and transportation of personnel for walk-to-work security. It will also be responsible for the supply of fueling services from its facility in Great Yarmouth.

For the rest of the five-page brochure of 10 brief news items, register here: https://goo.gl/NdgXqP

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Ten latest developments in the offshore wind logistics industry - Windpower Engineering (press release)

Its early days for the Trump administration, but we already know a few things. Our new president favors swift action to meet his campaign promises. Hes also shown himself to be a no-holds-barred cost-cutter.

These two prongs create a dilemma. Mr. Trump pinned his reputation on job creation, but given recent events he will now lack expected health care savings to reinvest in stimulus in a budget-neutral manner. Fortunately, significant opportunity exists to unshackle offshore drilling and simultaneously unleash hiring activity and boost federal revenues. Some moves will require only the stroke of a pen.

All it will take to spark a hiring spree is smart deregulation that balances human and environmental safety with American energy independence.

At stake are over 100,000 energy jobs, many offering six-figure salaries to hard-working, high-skilled Americans with or without a college degree. These would be in the oil and gas sector, the second largest contributor to U.S. revenues. Industry growth could also dramatically increase taxes, royalties, and rents from offshore production to help fund other pressing government priorities.

That this potential is untapped today is the consequence of the previous administrations abnegating its stewardship of our national energy independence. Obamas anti-fossil fuel onslaught spanned 145 new regulations and executive actions designed to delay and derail domestic exploration.

The effects were unsurprisingly harmful. In just one year from 2008 to 2009, acres open to offshore drilling fell from 8 million to 3 million. By 2010, the Gulf of Mexico went from contributing 30 percent of U.S. energy to just 20 percent. Only a doubling of output on private and state-owned onshore lands over the decade ending in 2015 kept America in a relatively safe zone for domestic supply. A new policy direction is urgently needed.

President Trump has signaled a more rational approach to fossil fuels, committing to reverse overly stringent power-plant restrictions and approving pipeline construction. Regarding offshore drilling, however, the administration has only put a toe in the deep waters of change.

The recent auction of 73 million acres in the Gulf of Mexico was welcomed but represented a modest difference from Obama-era plans. Similarly, appointing energy realists Secretary of State Rex Tillerson, EPA Administrator Scott Pruitt, and Secretary of Interior Ryan Zinke were inspired decisions, but filling remaining positions has been slow.

Staffing is only a first step on the path toward a top-to-bottom regulatory review a project that can deliver transformational impact without adding a dollar to the federal budget.

For example, in 2016 the Bureau of Ocean Energy Management (BOEM) pushed through a Notice to Lessees (NTL)thatimposed new financial-assurance obligations on oil and gas companies operating in the Gulf of Mexico. This regulation dramatically overhauled the existing framework for financial assurance that had been in practice for decades and had ushered in an era of responsible development while protecting our taxpayers from decommissioning obligations.

The purported goal of the change was to ensure that there are sufficient funds available to plug and abandon wells and decommission infrastructure once an offshore oil and gas facility reaches the end of its economic life. But there was no crisis in well decommissioning to compel the action. The NTL is one of the most egregious cases of hijacking arcane bureaucratic authority to debilitate an industry. According to industry experts, overturning the BOEM decision is worth over 360 million barrels in annual oil production, $10 billion in GDP, and 85,000 jobs. And this is just one regulatory action in need of immediate reevaluation.

A convincing nod in favor of energy production can have immense impact. Already ExxonMobil is creating more than 45,000 American jobs in Texas and Louisiana from Gulf investments. Imagine the employment impact if other companies could follow suit.

All it will take to spark a hiring spree is smart deregulation that balances human and environmental safety with American energy independence. Perhaps most importantly, increases in homegrown production will enable the U.S. to disentangle from foreign engagements and perhaps increase our national security.

Jobs, revenues, and more security these are the results of an oil and gas resurgence, which the Trump administration should be proud to spearhead and own.

Randall Luthi is National Ocean Industries Association (NOIA) CEO and President.

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White House can pursue smart energy deregulation worth tens of thousands of new jobs - LifeZette

April 7th, 2017 Sam Chambers Europe, Greater China, Offshore 0 comments

BW Offshore has today signed a cooperation agreement Chinas ICBC Financial Leasing to establish a long-term strategic partnership to jointly pursue large international infrastructure projects with a focus on FPSOs.

The two companies intend to offer cost effective production solutions for the global oil and gas industry, BW Offshore said in a release to the Oslo Bors today.

A strong financial partner enables BW Offshore to address new growth opportunities, commented Andreas Sohmen-Pao, the Chairman of the board of BW Offshore.

The pair will proceed with further detailed discussions with the aim to establish a project consortium framework, and identify other potential strategic cooperation opportunities.

The intention is to explore and develop mutually beneficial FPSO and FPSO related projects globally in the interest of bothcompanies and local Chinese-invested enterprises, and to build a platform for promoting Norwegian and Chinese cooperation on the international arena, the release stated.

The Chinese leasing giants first equity participation will be in the BW Catcher FPSO through the subscription of preference shares. The FPSO, a $1.2bn investment, will operate on the Catcher field in the UK North Sea with start-up towards the end of 2017.

The parties further agreed to establish a cooperation to explore the Kudu-gas-to-power infrastructure project where BW Offshore holds a 56% stake in the upstream license.

This partnership opens up for new models for developing FPSOs and FPSO related projects, said Carl Arnet, the CEO of BW Offshore.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the worlds oldest newspaper, Lloyds List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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BW Offshore and ICBC Financial Leasing form powerful FPSO pact - Splash 247

New Bills Take Aim at Offshore Tax Haven Abuse Common Dreams WASHINGTON - Congressional lawmakers introduced two measures Wednesday to close a number of offshore tax haven loopholes in a move welcomed by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition), a non-partisan ... New Bills Introduced To Curb Offshore Tax Avoidance, End Tax GimmicksState PIRGs all 3 news articles »

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New Bills Take Aim at Offshore Tax Haven Abuse - Common Dreams

4/5/2017

SAN DONATO MILANESE, Milan -- Eni has made a new discovery of gas and condensates offshore Libya in the Gamma Prospect, in the Contract Area D, 140 km offshore from Tripoli, in Libya. The discovery, made through the well B1 16/3, is located 15 km south west of the Bouri field and 5 km north of the Bahr Essalam field. The drilling of the Gamma prospect is part of the near-field exploration strategy of Eni, targeting opportunities, that in case of success can exploit synergies with existing infrastructures reducing the time to market and providing additional gas to the local market and export.

The well, drilled in 150 m of water depth, reached a total depth of 2,981 m and encountered gas and condensates in the Metlaoui Group of Eocene age. The well has the capacity to deliver, in production configuration, in ecxess of 7,000 boepd and represents a further discovery made by Eni in Libyan offshore Area D, following the discoveries made in 2015.

Eni, through its subsidiary Eni North Africa BV, is operator of Contract Area D with a 100% working interest in the exploration phase. Eni has been present in Libya since 1959 and currently produces 350,000 boped in equity in the country.

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Eni discovers gas, condensates offshore Libya - World Oil - WorldOil (subscription)

One of the things that I have always appreciated about the quarterly reports of sister companies Seadrill Ltd. (NYSE:SDRL) and North Atlantic Drilling Ltd. (NYSE:NADL) is the in-depth way in which the two companies discuss the conditions in the offshore drilling industry. In general, the two companies have historically made somewhat congruent statements. In the latest quarter, however, this was not the case. In this article, I will discuss what the two companies have to say and attempt to make sense of it all.

As any long-time follower of my articles, or indeed of the offshore drilling industry in general, is already well aware, the market has been oversaturated with drilling rigs for just over three years now. When combined with the strained cash flows that most exploration and production companies have suffered from since oil prices declined sharply in 2014, these rigs have seen their competitive new contract dayrates decline as this large number of rigs competes for those few contracts that are actually being awarded. Unfortunately, this situation is unlikely to change in the near future. As both Seadrill and North Atlantic Drilling state:

The short to medium term outlook for [the] chartering market continues to be extremely challenging. While tendering activity has continued at increased levels over the past few months, especially in the North Sea, near term drilling programs continue to be largely based on opportunistic spot market activity and a number of oil companies continue to have excess rig capacity on contract. Available work is fiercely competitive with drilling contractors bidding below cash breakeven in some instances in order to keep rigs active.

Interesting, however, and perhaps counter to some media reports, both companies note that tendering activity has begun to increase. For those who are unfamiliar with the industry, that means that the number of contracts actually being awarded has begun to increase. This is a positive sign, as it indicates that oil and gas companies are once again interested in developing their offshore oil fields, although thus far this increase has not been sufficiently large to offset the glut of available rigs.

However, things could certainly improve for the industry over a longer time period, particularly for those companies like Seadrill and North Atlantic Drilling whose fleets consist almost entirely of new, modern drilling rigs. The reason for this is rig scrapping. As I have discussed in previous articles, a large percentage of the currently in service floating rig fleet is either over 25 years old or close to that milestone and will be due for their five year special surveys within the next few years.

When we consider that such surveys can cost in excess of $100 million to perform, it may make more economic sense for the rig owner to scrap the rig rather than spend the money to perform that survey. This will result in a gradual shrinkage of the oversupply of floaters, although Seadrill believes that a meaningful increase in demand will be needed before the industry fully recovers and that is not expected to occur until the end of the decade.

North Atlantic Drilling expects that this broader trend will also apply to its more focused market. In the next six months, a total of fourteen floating rigs and eight jackups currently in operation in the Norwegian North Sea and United Kingdom will be completing work on their current contracts. Of these, twelve, or 54.5%, are at least 25 years old. When added to the already idle units, there will then be a total of 33 idle rigs in this one market alone that are 25 years old or more. Although thus far, few contractors have been scrapping their harsh environment rigs, North Atlantic Drilling expects that scrapping activity will increase due at least in part to the age of these rigs and the costs involved in bringing them back to service. If the company is right, this scrapping will eventually return balance back to the North Sea market.

The market for jack-up rigs is perhaps more dynamic than the market for ultra-deepwater rigs. This is because of the relatively short-term nature of jack-up contracts. During the most recent industry upcycle that ended in the latter stages of 2013, the longest jack-up contracts that were being awarded were approximately one year in length. Meanwhile, floating rigs were routinely getting contracts of three to five years in length or longer. As a result of this, jack-up rigs are more exposed to changes in the marketplace. Therefore, the jack-up market typically bottoms out earlier and recovers faster than the floating market.

Unfortunately, Seadrill does not expect the market for jack-up rigs, at least the market for benign environment jackup rigs, to recover within the near- to medium-term (North Atlantic Drilling is somewhat more optimistic about the market for harsh environment rigs, as already discussed). One reason for this is that the supply glut in the jackup market is greater in scale than the one present in the floating rig market.

In addition, the company expects that a smaller proportion of the jackup fleet will be scrapped in the coming years compared to the floater fleet. This is at least partly due to the fact that the supply glut was exacerbated by offshore drilling contractors aggressively building up their jackup fleets during the last industry boom. It is unlikely that the industry will scrap brand-new rigs in aggregate or en masse. Thus, Seadrill expects that it will take longer for this segment of the industry to recover than the floater segment.

Interestingly, Seadrill expects that the jackup market will be more stable than the floating rig market going forward. There are two reasons for this. The first is the driving factor of oil company spending on jackup rigs. While exploration and production companies largely contract floating rigs to explore for new sources of oil and gas, an area in which spending has all but dried up, jackup rigs are generally contracted to develop resources located in shelf regions.

Oil companies are still willing to spend money to develop these resources, albeit perhaps not as much as they were a few years ago. A significant factor in the dayrate decline in this market segment comes from the supply side of the market: The oversupply of rigs has resulted in contractors aggressively bidding against each other to secure contracts and thus driving prices down.

A second reason why the jackup market s somewhat stable is economics. Unlike deep- and ultra-deepwater production, shallow-water shelf drilling is profitable with oil prices at today's levels. Here is a chart showing the approximate cost of producing a single barrel of oil in each of the environments being exploited today:

Sources: Seadrill, Morgan Stanley Equity Research.

Admittedly, this chart is a few years old at this point and technological improvements made since 2014 have brought down some of these costs. For example, several North American shale plays can produce oil for under $40/barrel. However, as is clearly shown, the costs of shallow-water shelf production are below today's oil prices. Therefore, it is still economically viable for an oil company to develop these fields. Thus, the jackup market remains relatively stable even though dayrates are unlikely to improve anytime soon.

In conclusion, North Atlantic Drilling appears to see the overall drilling market recovering somewhat faster than Seadrill does. However, it is worth considering that North Atlantic Drilling operates in a much more focused segment of the drilling market than Seadrill itself. It is certainly possible that the harsh-environment segment will recover faster than the industry as a whole. Regardless, it appears certain that dayrates will not recover anytime soon, and thus drilling contractor cash flows will be challenged over the near to medium term.

Disclosure: I am/we are long SDRL, NADL.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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Seadrill And North Atlantic Drilling Discuss Conditions In The Offshore Drilling Industry - Seeking Alpha

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GE completes first offshore nacelle for 396MW Merkur Recharge (subscription) GE Renewable Energy has finished assembly of the first of 66 nacelles for the 396MW Merkur offshore wind project in the German North Sea, with the wind farm on track for a late-2018 completion. The nacelle will be stored at GE's facility in Saint ... GE unveils first Merkur nacellereNews all 2 news articles »

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GE completes first offshore nacelle for 396MW Merkur - Recharge (subscription)