Despite the presidents decision to withdraw the U.S. from the Paris Agreement, town councilors in New Hampshire are trying to take action on climate change at the local level by pushing for an offshore wind task force.

According to a local report from fosters.com, the Town of Durham wants Gov. Chris Sununu, R-N.H., to urge the U.S. Bureau of Ocean Energy Management to create a task force devoted to offshore wind development specifically on the Gulf of Maine. A measure calling for this action was passed 7-1 during a town meeting yesterday.

The meeting agenda states that the resolution endors[es] the formation of a multi-state task force to explore the potential for offshore wind development along the Maine and New Hampshire coastline.

The report notes that the resolution has garnered the support of a 350.org affiliate, the Seacoast Anti-Pollution League and three local energy commissions.

In spite of the change weve seen at the federal level, there is a lot we can do at the state and federal level [on climate change], and this is one concrete action we can do, Doug Bogen from the Seacoast Anti-Pollution League said at yesterdays meeting.

Recently, a legislative committee in Maine voted unanimously to deny a bill aimed at forcing the University of Maine to move a pair of demo floating wind turbines farther from the coast of Monhegan Island. The bill, introduced by Sen. Dana Dow, R-Waldoboro, in February, had sought to bar wind turbines within 10 miles of the island.

More here:

Town Council Pushes For Offshore Wind In Gulf Of Maine - North American Windpower

A proposal before the Maine Legislature would prevent the state from permitting an offshore wind energy project in the vicinity of Monhegan Island. (MGN)

PORTLAND (AP) -- A proposal before the Maine Legislature would prevent the state from permitting an offshore wind energy project in the vicinity of Monhegan Island.

Monhegan Island is a tiny island about 12 nautical miles off of Maine's mainland that is well known as a home to artists, seasonal residents and lobster fishermen. Maine Aqua Ventus intends to install a two-turbine, 12-megawatt project off its coast.

Republican state Sen. Dana Dow, who represents the island in the Statehouse, wants to prevent the project from happening. His proposal would create a prohibited zone where an offshore wind energy test area would not be able to be located.

Dow's proposal would also prohibit the state from issuing a permit for an offshore wind project within 10 nautical miles of the Monhegan Lobster Conservation Area.

Follow this link:

Proposal would prevent offshore wind project in Maine - WGME

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 ...

Originally posted here:

Offshore Money, Bane of Democracy - New York Times

A bill aimed at moving a wind energy test site farther from Monhegan Island would have the practical effect of ending Maines bid to build the countrys first commercial-size, floating wind turbines, according to a federal Department of Energy official.

If it moved, it would kill the project, Walt Musial, offshore wind program manager at the National Renewable Energy Laboratory in Golden, Colorado, told the Portland Press Herald. This is a unique site. If they had to start over, it would set the project back five years and spoil the economics.

Musial was commenting on a measure that would force the relocation of the Maine Aqua Ventus project. The University of Maine-led venture has spent years surveying wind and wave patterns, marine life and bird migration at a site in state waters, nearly 3 miles southwest of Monhegan.

Based in part on the data collected, the project has received $10.7 million in energy department funds and is eligible for an additional $40 million. If the project can win permits and secure enough money, the Aqua Ventus team hopes to begin testing a pair of floating turbines in 2019.

But a bill now awaiting a hearing in the Legislature would ban any offshore wind energy project within 10 nautical miles of the Monhegan Lobster Conservation Area. The wind project site is located at the southern edge of the lobster zone.

A spokesman for a group of island residents behind the bill said the university is responsible for the crisis by changing the scope of the project. What started in 2009 as a scaled-down, temporary experiment has grown to a 20-year, full-scale project with blades that would reach 576 feet above the waterline and an undersea cable to the mainland, at Port Clyde. A project that size, said Travis Dow of Protect Monhegan, cant help but impact the view for tourists and artists, who drive the islands summer economy, and the experience for birders, who flock in spring and fall for annual migrations.

Its unfortunate, but they set themselves up for this, Dow said. This project is very important for Maine, I agree. But they need to do it right, and it has outgrown its test site.

The conflict is taking shape just as ocean wind power ambitions are ramping up along the East Coast.

The nations first offshore wind farm went online last year off Rhode Island. Both New York and Massachusetts are seeking power from big wind ocean farms. These projects would be in shallow water, with turbine towers set in the sea floor using conventional technology used in Europe. Maine Aqua Ventus is pioneering the next generation of wind energy floating concrete platforms in deep water, far from land, where winds are steady and people cant see them.

Musial said that while a few floating platform designs are being tested in other countries, Maine Aqua Ventus is the only one in the United States and is using a technology unique in the world.

This has the potential to create a whole new industry in the United States, he said.

The bill, L.D. 1262, was printed last week and has yet to be scheduled for a committee hearing. In the coming weeks, Maine lawmakers will have to decide whether the short-term concerns of 30 or so year-round Monhegan residents and their supporters outweigh the projects long-term economic and energy potential, at least for the foreseeable future.

PROJECT CHANGES

The eight-year journey to this crossroads is long and convoluted. But these are some high points.

The Monhegan test site was selected through a state-run process that included locations off uninhabited Boon Island and Damariscove Island. Monhegan was picked because its 12 miles from the mainland, has steady winds, a limited number of fishermen and extreme electric rates.

The 2009 law that designated the site allowed up to two turbines, a maximum capacity of 25 megawatts and one transmission cable. In early meetings with island officials, though, the university promoted a one-third scale turbine, with no cable, and a test period of months.

But over time, the scope of the project changed. Engineers decided to test a one-eighth scale model of the concrete platform off Castine, in more-protected waters. Maine Aqua Ventus also won an energy department award for commercial-scale testing. That led to an upgraded design for two, 6-megawatt turbines on full-size platforms off Monhegan, with a cable to the mainland and the island.

To sort through the proposal, residents formed the Monhegan Energy Task Force. Members watched the Maine Public Utilities Commission approve a 20-year power contract in 2014. Then the project lost a bid for more federal funds, and the sense of urgency evaporated. A year later, a competitor for the federal grant fell away and the project was back on track.

Protect Monhegan formed last fall, after it became clear that the full-scale project might become a reality. Dow said at the time that the group was quickly able to raise $40,000, some of it from visitors and summer residents. It hired a veteran public affairs consultant, Ted OMeara, and Jon Doyle, a former assistant attorney general.

Theres debate on the island over how many of the 65 year-round residents support the group. Others are more interested in negotiating a community-benefits power deal. At 70 cents per kilowatt hour, island electric rates are among the highest in the country and five times above mainland averages.

Either way, Doyles law firm drafted the bill and the group asked Sen. Dana Dow, R-Lincoln (no relation to Travis Dow) to sponsor it. Asked his position on the bill, Dana Dow expressed the view that moving the project likely would kill it, but said it was his job to submit proposed laws for residents of his district.

I believe legislators need to listen to people on the island and make their decisions accordingly, he said. They need to decide what the majority group on Monhegan wants to do. And I dont know which that is, to tell the truth.

START FROM SCRATCH

The lobster conservation area earmarked in the bill is roughly 30 square miles and surrounds the island. It was created by state law 20 years ago to set aside an exclusive fishing ground for island residents.

In 2009, the university asked Monhegan lobstermen to map the part of the zone where they did the least amount of fishing. They identified a sector on the southwest tip, along the 3-mile state boundary. Thats where Maine Aqua Ventus established its test site.

According to the university, the site now is among the most extensively studied in the Gulf of Maine. But Travis Dow contends that past studies such as ones done for migrating bats and birds arent relevant now, because the blade height and rotor diameter have increased so much. He said the studies need to be redone, so they might as well move the project to Boon Island, 6 miles off York, or Damariscove, 5 miles off Boothbay Harbor.

But Jake Ward, the universitys vice president for innovation and economic development, said the federal grant money is linked to the Monhegan site.

Wed have to start from scratch someplace else, Ward said. Without a doubt, if we moved the site, wed lose the funding.

That sense was confirmed in an email to the Press Herald from the Department of Energy. The department said that an ongoing federal environmental review process needed to approve the project is site specific, meaning that changing the projects location may require additional baseline surveys. Moving the project outside the 3-mile state boundary into federal waters, the department added, would trigger an entirely new siting process by the Bureau of Ocean Energy Management.

The energy department plans to decide whether to award Maine Aqua Ventus up to $40 million in final funding early in 2018. To gather public input, federal officials came to Maine in late February and early March for meetings in Tenants Harbor and on Monhegan.

In its email response to the Press Herald, the department didnt indicate how it would react if the project were forced to move. But Musial, who has worked with the university on the engineering details since 2009, said Maine Aqua Ventus is part of an advanced demonstration program and has received investment and government resources over the years that wouldnt be replicated at another location.

It would have to start over as an independent, commercial project, if the site was moved, he said.

Tux Turkel can be contacted at 791-6462 or

[emailprotected]

[emailprotected]

More:

Bill could scuttle UMaine offshore wind project near Monhegan - Press Herald

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.

Link:

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.

Read the original:

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

This week's review is our second look at an oil and gas producer focused in the Gulf of Mexico. We first reviewed W&T Offshore (NYSE:WTI) in November 2016. The company's latest quarterly results show a company that is accelerating in this increasing commodity price environment. Here are some highlights:

W&T Offshore was able to keep its production relatively stable even in light of a much reduced capital budget in 2016. Looking ahead to 2017 and an increased capital budget, Tracy Krohn, CEO, says the company will focus on low-risk projects that offer rates of return from 80% to over 100%. With commodity pricing recovering from historic lows, W&T has a great opportunity to increase revenues and profits in 2017 and beyond. The company's 2019 bonds, which have a current yield-to-maturity of about 18.5%, are a fantastic opportunity for investors to participate in the recovery in the oil and gas industry. Already part of our Distressed Debt 1 fund, these short 26-month bonds also make a sound addition to our FX1 and FX2 managed income portfolios.

Outstanding Q4 Results

W&T Offshore recently reported its fourth quarter (Q4) 2014 results. What was revealed is a company beginning to reap the benefits of its meticulous two-year program of cost reductions, holding production steady with minimal capital investment, and debt reduction. Selected highlights from the company's Q4 results include:

Valuable Gulf of Mexico Assets

In W&T's last earnings call, company Chairman and CEO, Tracy Krohn, talked at length about the company's assets in the Gulf of Mexico, specifically the low decline rate of the wells in the Gulf of Mexico as compared to an onshore well in one of pervasive shale plays located around the U.S. The point of his comments is best illustrated by one of the slides from the accompanying presentation.

(Source: W&T Offshore Investor Presentation-March 2017)

As is evidenced here, the production decline in the Gulf of Mexico well in the early years of production is much shallower than the well located in the shale play. This shallow decline curve represents many of W&T's projects and directly contributes to the company's ability to maintain steady production with very little capital expenditure (CAPEX). This has been a significant factor in the company's ability to maintain relatively stable production while maintaining a small capex budget. W&T's abilities in producing in the offshore environment is a distinguishing feature that sets the company apart from many of its onshore competitors. Furthermore, these low-decline assets are much more valuable than traditional onshore wells and can be a positive element if W&T looks to leverage these in the future.

Results of Bond Exchange

One of the most notable developments for W&T was the company's bond exchange completed in September 2016. This bond exchange reduced the company's outstanding long-term debt by $408.2 million as well as effectively pushed out the maturity of a large portion of the company's long-term debt. The effects of this bond exchange have been revealed in W&T's Q4 2016 results. Most obvious is the significant decrease in interest expense year over year. Q4 2016 interest expense was $11.5 million as compared to Q4 2015 interest expense of $26.8 million, a whopping decrease of 57%. This massive decrease helped to boost the company's interest coverage to a level that should be extremely enticing to prospective bondholders.

Outstanding Interest Coverage

At first glance, W&T's interest coverage is good, even comfortable. In its latest quarterly results, the company showed operating income of $21.3 million and interest expense of $11.5 million. This gives a comfortable interest coverage of just under 2x (1.9x to be specific). However, if one digs a bit deeper to remove the non-cash depreciation charge, operating income jumps to $60.2 million for the quarter. Using the same interest expense, this results in a fantastic interest coverage ratio of 5.3x. This interest coverage with a bond indicating a current yield-to-maturity around 18.5% is tough to find.

Prospective bondholders take note.

About the Issuer

Founded in 1983, W&T is an independent oil and natural gas acquisition, exploitation and exploration company, with a focus primarily in the deep waters of the Gulf of Mexico. The company's founder and CEO, Tracy Krohn, has been leading W&T for the past 31 years. It has developed significant technical expertise and has successfully discovered and produced properties on the conventional shelf and in the deepwater across the Gulf of Mexico. The company owns working interests in 54 fields in federal and state waters and has interests in leases covering approximately 750,000 gross acres. In 2015, W&T sold the West Texas Permian Basin properties that had been acquired in 2011. W&T began trading on the NYSE under the ticker symbol "WTI" in 2005.

Continued Cost Reductions

As discussed in our earlier review of W&T Offshore, the company has done a masterful job of reducing its expenses in the prevailing low-cost commodity environment that has dominated the domestic economy for the past two and a half years. Its latest quarterly review shows a continuation of management's continued vigilance in keeping costs as low as possible. Q4 2016 results showcase decreased LOE (lease operating expenses) of $33.8 million, a reduction of 31.4% from Q4 2015. G&A expenses (general and administrative) also registered a notable decrease in Q4 2016, dropping by 11% or $1.7 million, to $14.4 million. W&T has worked diligently to decrease its costs during the last few years as illustrated here:

(Source: W&T Offshore Investor Presentation-March 2017)

Return to High Margins

In our last review of W&T Offshore from November 2016, we discussed the company's traditionally high margins. Considering the state of commodity pricing over the past few years, it was not surprising that the company's adjusted EBITDA margins fell in 2015 to 46%.

Year

2011

2012

2013

2014

2015

Adjusted EBITDA Margin

67%

62%

61%

60%

46%

However, the W&T's Q4 2016 results show a return to the company's historically high adjusted EBITDA margins. Q4 2016's adjusted EBITDA margins registered at 60%, up from 49% in Q3 2016, and showing a massive improvement over Q4 2015's level of 39%.

Risks

The default risk is W&T's ability to perform. As the low price oil environment has continued, the company has done a masterful job of keeping operating costs low while minimizing production decreases. Its latest quarterly results show a return to its historical adjusted EBITDA margins, a good sign for investors. The company's focus in the Gulf of Mexico has helped the company to maintain relatively stable production with little capital investment. More impressive for current and prospective bondholders, is the company's outstanding interest coverage of 5.3x. Although the yield-to-maturity has dropped on these 2019 bonds since our last review, the current 18.5% yield-to-maturity is still extremely attractive and outweighs the risks identified here.

Since W&T's revenues come directly from the sale of the oil and gas it produces, it is exposed to the volatility in the commodities markets. Both oil and natural gas have seen appreciation in price over the past year. However, it is difficult to predict where prices will go next. Another significant and prolonged decrease in commodities pricing could have an unfavorable impact on W&T's revenues and profitability.

These June 2019 bonds, couponed at 8.5% and currently yielding an extremely competitive 18.5%, have similar duration and yield to other bonds reviewed on the Bond-Yields.com site, specifically 16% BakerCorp and 28.5% ION Geophysical.

Summary and Conclusion

W&T Offshore continues to stay the course - keeping expenses low, minimizing production decreases with a much reduced capex budget, while at the same time returning to the company's historically high margins. The company's successful bond exchange from Q3 2016 significantly decreased interest expense by 57%, resulting in an unbelievable interest coverage ratio of 5.3x, which is fantastic for current and prospective investors. These relatively short 26-month bonds, couponed at 8.5% and with a current yield-to-maturity of about 18.5%, already represents one of our positions in our top-ranked Distressed Debt 1 hedge fund. Additionally, we have identified these bonds for overweighting, or as a preferable addition, to our FX1 and FX2 global high yield income portfolios.

Issuer: W&T Offshore Inc.

Coupon: 8.50%

Maturity: 06/15/2019

Ratings: Ca / CC

Pays: Semiannually

Price: 82.5

Yield to Maturity: ~18.53%

Disclosure: To obtain higher yields and keep costs as low as possible, we typically bundle smaller retail orders into larger institutional sized orders with many global trading firms and bond platforms. Our main priority is to provide the best opportunities for our clients. Our bond reviews are published on the Internet and distributed through our free email newsletter to thousands of prospective clients and competitive firms only after we have first served the needs of our clients. Bond selections may not be published if they have very limited availability or liquidity, or viewed as not being in the best interests of our clients. Durig Capital and certain clients may have positions in W&T Offshore June 2019 bonds.

Please note that all yield and price indications are shown from the time of our research. Our reports are never an offer to buy or sell any security. We are not a broker/dealer, and reports are intended for distribution to our clients. As a result of our institutional association, we frequently obtain better yield/price executions for our clients than is initially indicated in our reports. We welcome inquiries from other advisors that may also be interested in our work and the possibilities of achieving higher yields for retail clients.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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

Read more from the original source:

Double Up For Over 18.5% YTM With W&T Offshore's June 2019 Bonds - Seeking Alpha

Source: Drillship Pacific Mistral - Courtesy Offshore Energy Today.

Investment Thesis:

The offshore drilling industry plays an important part in the Oil & Gas supply chain.

Did you know that Oil production from offshore locations accounts for approximately 29% of the global crude oil production in 2015, according to the EIA? This percentage has been nearly constant since 2005. I was not able to find the repartition for 2016, yet. However, It is highly likely that offshore accounts for 28% to 30% as well.

The main locations are in Saudi Arabia, Brazil, Mexico, Norway/UK and the USA and represent a total of approximately 27 Million BOE/d.

The bulk of the crude production is still in the "shallow waters", which are generally cheaper and less technically challenging.

In this area, Oil and Gas producers will need a rig less expensive anchored to the rock floor, called Jack-up.

However, there has also been a move toward "deep waters" and "ultra-deepwaters" projects the past 5 to 10 years. Exploratory drilling in deeper waters and ultra-deep waters is naturally more costly and complex for O & G companies, but technology advancements and the near exhaustion of shallower prospects have forced oil majors to explore increasingly deeper waters, particularly in Brazil, West Africa and in the Gulf of Mexico.

The rigs required to perform the drilling in the "deep waters" segment are called floaters or mainly Drillships and Semi-submersibles. Let's have a look at the Drillships situation here.

A quick review of the Drillship fleet Worldwide as of March 10, 2017.

Note: I have used what has been publicly available on InfieldRigs website and translated to easy-to-read graphs that will help you to understand the situation as we go through 2017. I will update this article every quarters.

Basically, the Drillships segment represents a total of 149 rigs including the ones under-construction as of March 10, 2017. The main categories are as follows:

Excluding the "under-construction" segment we actually have 119 rigs in the market and drilling, ready to drill or waiting to drill. Actually 47.9% of these rigs are working and receiving a day rate from a client. The others are moored, on standby or idle in different states.

Most of these rigs are fairly recent and the average age is 9 years (built 2007).

I have identified 6 different locations where 57 rigs are drilling as of January 1, 2017:

As we can see, North America and more particularly the US Gulf of Mexico, is the main player

together with Brazil they represent approximately 67% of the total drillships contracted. Since the oil crash, West Africa has lost approximately 50% of its drillships fleet.

The middle East and Europe are active both in the jack-ups and Semi-submersibles segments, not really in the deep waters segment.

Brazilian offshore production increased by 58% between 2005 and 2015, making Brazil the second-largest offshore producer in 2015 and probably in 2016 as well. Below a very interesting repartition per location.

This production growth in Brazil was made possible by the expansion of deepwater pre-salt project, which is "deep waters".

Until recently, this field was exclusively owned by Petrobras (NYSE:PBR) (National Oil Company NOC), however, On October 2016, Brazil approved handing Pre-salt oil reserves to Oil Majors such as Statoil (NYSE:STR) or TOTAL (NYSE:TOT) which is expected to boost production.

With production increasing from approximately 41,000 barrels per day in 2010 to a million in mid-2016, Petrobras believes Brazil's pre-salt discovery is one of the world's most important in the past decade. It is believed that reserves of over 50 billion barrels could exist in the basin, nearly four times the current national reserves of roughly 14 billion barrels.

The United States offshore production has been boosted by recent strong production in the Gulf of Mexico.

According to EIA in February 2016:

Between 2008 and 2016, offshore production has grown nearly 19%, with several large projects coming online in 2016 and 2017. The Gulf of Mexico saw a production of 1.728 MBOEd in December 2016, according to EIA (From 0.72 MBOEd in 1982).

West/East Africa segment has seen a huge decline in Deep waters and the actual production of 4.6 MBOEd is set to dip to 2.6 MBOEd by 2030, unless CapEx is restored in this area, according to WoodMcEnzie.

Wood Mackenzie claims planned oil and gas investments in Sub-Saharan Africa over the next five years have been reduced by $100 billion. Major oil company cutbacks account for the bulk of the reductions.

Conclusion:

The deep waters segment is an important segment and investors should not avoid this sector as a long-term investment just because it is experiencing a terrible downturn. Yes, it is struggling but.

As Mark Twain once commented to a reporter "The reports of my death are greatly exaggerated." after "hearing on good authority that it was thought to be dead", offshore drilling is definitely struggling but is far from dead.

The main issue for us all, is to apply the right trading/investing strategy by following closely what is going on. The drillship segment is quite small and easy to follow.

The actual situation is not positive, and the near-term may likely bring more pain. However, It is clear to me that we have reached a bottom though, if oil prices can trade above $50-$60 a barrel in the second part of 2017? Oil prices are of a paramount importance.

Last week, we experienced some serious oil price weakness after the EIA reported a record US stock pile now at 528.4 Mbo. However, it is clear that OPEC and non OPEC will likely continue to cut production despite the US Shale booming again, with a production approaching the 9.2 MBOPD again...

Please read my most recent article about this situation. Click here.

Understanding the industry through simple numbers helps to decide and pinpoint the right timing and the right company. One of my main companies in this sector is Transocean Ltd. (NYSE:RIG) -- the strongest in the drillship/semi-submersible sector by far with a backlog over $11 billion comprising of $7+ billion for the floater segment -- Other such as Noble (NYSE:NE), Ensco (NYSE:ESV), Rowan (NYSE:RDC), Diamond offshore (NYSE:DO) could be also selected as good candidates.

Important note: Do not forget to follow me on the offshore drilling. Thank you for your support.

Disclosure: I am/we are long RIG, ESV, RDC.

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.

Additional disclosure: I may add NE and DO?

Read the original post:

Offshore Drilling - Part I - Complete Overview Of The Drillships Segment Worldwide As Of March 10, 2017 (Update) - Seeking Alpha

The Revenue Commissioner's offshore assets letter arrived in the post recently and the only thing missing was the soundtrack from the movie Jaws.

Most brown envelopes with a harp on them make me go into an irrational panic. It's a bit like when security personnel at the airport ask me if I've packed my bag myself.

I have. But, having watched too many documentaries about innocent (and not so innocent) drug mules, I am always struck by a momentary terror that heroin with a street value of 8m has been placed in my luggage when I'm looking at the departures board.

The offshore assets letter the Revenue sent to 500,000 taxpayers, is - if the menacing and, frankly, entirely confusing text is anything to go by - designed to scare the living hell out of us.

And in fairness to the scare masters-in-chief at Dublin Castle, the Revenue have achieved that desired effect in bucket loads. Accountants and advisers, financial journalists too, have been inundated with calls from stressed taxpayers bewildered by the missive, which followed an announcement on Budget Day last October by Finance Minister Michael Noonan.

Noonan announced that the Government, with the mutual assistance of overseas tax agencies, was going to target offshore income and assets that have not been declared.

The deadline for confessions or "necessary corrections" as the Revenue calls them, is May 1. And there is a real benefit in fessing up, including reduced penalties, not having your name published in the tax defaulters list and avoiding prosecution.

The real and necessary target is large-scale tax evaders. But the sweep could also affect ordinary decent taxpayers who may or may not have bank accounts, pensions and other undeclared offshore assets.

The problem with the Revenue's "qualifying disclosure" letter is that it fails to spell out in plain English the nature and impact of the "significant changes" relating to "a person's offshore matters or matters".

"These changes restrict a person's opportunity to make a 'qualifying disclosure'", says the letter, before adding "if this affects you, there are full details on our website".

That's fine for high-net-worth individuals (HNWI's) who rarely make an appearance on the Revenue's quarterly tax defaulters list, with a coterie of advisors to manage their tax exposures.

But the opaque language and instructions are unfair to more vulnerable cohorts of taxpayers, such as the elderly or those with limited financial literacy.

That said, it is pensioners, especially those who worked in the UK in their salad days, who may need to clarify if they will be caught by the new offshore assets net.

Almost 135,000 Irish residents were in receipt of British state pensions as of last August. And although many of them will fall outside of the annual income tax threshold, they may also be renting properties overseas and failing to declare income, intentionally or not.

My guess is that despite all the publicity surrounding exposs such as Lux Leaks and Panama Leaks and another incarnation known as Swiss Leaks, it's not politicians and businessmen who have most to fear.

I suspect the vast bulk of monies recovered from the Revenue's latest offshore haul will come from the masses of terrified pensioners who will answer Ireland's call.

Sunday Indo Business

Continued here:

Dearbhail McDonald: Offshore assets haul may net minnows rather than sharks - Irish Independent

Hearings starting Monday could determine whether Maryland becomes a leader in the development of offshore wind power in the United States.

The Maryland Public Service Commission will begin what could be two weeks of hearings on proposals from two developers to build wind farms in the Atlantic Ocean off Maryland. The two developers are competing for up to $1.9 billion in subsidies over 20 years, paid for by the state's electricity ratepayers, a crucial financing mechanism for developers to recoup the cost of building the massive wind farms.

The commission is expected to decide whether to move forward with one by May 17.

Offshore wind energy, which is booming in Europe, offers significant potential to replace aging energy infrastructure along the East Coast, create jobs and bolster the economy.

The federal government has leased thousands of acres off the Eact Coast to be developed into wind farms, but the industry has yet to take off in the United States. Wind development has been hobbled largely by its cost as well as regulatory hurdles and opposition from politicians opposed to subsidizing energy, coastal residents worried about views and environmentalists worried about migratory birds.

Only one small offshore wind farm has been installed in the United States, just five turbines off Block Island in Rhode Island. But other projects are in the works off Massachusetts, New Jersey and North Carolinia.

If Maryland successfully becomes one of the first states to establish an offshore wind farm, the project could position the state to be a leader in the industry and serve as a hub for the contractors who could service future offshore wind farms up and down the East Coast.

"The opportunity Maryland has is huge," said Liz Burdock, executive director of the Business Network for Offshore Wind, a national advocacy group. "Where the infrastructure goes into place, where first companies set up, will be the base for where the rest of the industry is served."

Maryland has set a goal of getting a quarter of the state's power from renewable sources by 2020. Of that, up to 2.5 percent must come from offshore wind.

To meet those goals, utility companies such as Baltimore Gas & Electric Co., will be required to buy energy credits from offshore wind farms, solar companies and other renewable energy producers.

To encourage development in offshore wind, state lawmakers in 2013 approved legislation that will allow energy companies to pass on the cost of the offshore wind credits to ratepayers. Under the law, residential power bills could go up $1.50 a month and businesses could pay up to 1.5 percent more, to support an offshore wind project once it is up and running.

The Maryland Public Service Commission will decide how much utilities should pay for the offshore energy credits and from which project, essential determining which might get built.

"Maryland wants to be a leader in renewable energy and wants to have more homegrown renewable energy," said James McGarry, a policy director for Chesapeake Climate Action Network, an environmental nonprofit in Takoma Park. "Offshore wind is potentially the biggest untapped source of homegrown renewable energy."

The two proposals under consideration are from US Wind, a Baltimore-based subsidiary of Italian energy and construction giant Toto Holding SpA, and Deepwater Wind, the Providence, R.I. -based developer of the only wind farm off the U.S. coast.

In 2014, US Wind won a federal auction for the leases of two offshore wind sites off the coast of Ocean City. The company wants to build a 750-megawatt wind farm with 187 turbines on the 80,000-acre site. The project would be built in three stages, with the first capable of creating 250 megawatts of wind power. The first stage could be complete by 2020 and the entire project could be built by 2022.

The first stage of the project would cost about $1 billion, said Paul Rich, US Wind's director of project development. He declined to share the proposed impact to ratepayers' energy bills.

Rich said he thinks the company's "go big" approach is Maryland's best bet for establishing itself as a long-term industry leader.

The plan calls for manufacturing facilities at Sparrows Point in Baltimore County that would be run by contractors who will make the massive turbines and bases they sit on. Rich envisions those facilities becoming the go-to resource for future projects up and down the East Coast.

All told, the project could create 5,000 construction, fabrication, electrical and support jobs, he said.

"We are trying to embrace a vision," Rich said. "This will be the Silicon Valley of industrial activity for the offshore wind industry for the whole East Coast."

Meanwhile Deepwater Wind is proposing a smaller, $720 million project that executives called the "right size" for Maryland.

The Skipjack Wind Farm would be located on a 96,400-acre site about 17 nautical miles northeast of Ocean City, actually in waters off Delaware. The company has proposed building 15 turbines, capable of producing 120 megawatts of energy, with the possibility of adding more turbines in the future. Construction could start in 2020 with the farm operational by 2022.

Deepwater has proposed a price for its energy that would cost residential customers 34 cents a month, said Deepwater CEO Jeff Grybowski.

Deepwater acquired the site's lease last year from utility company NRG Energy. The lease had been among the first granted by the federal government in 2012, but NRG's planned wind farm stalled due to financial constraints.

Deepwater leaders said their more conservative proposal is based on their experience developing the only other offshore U.S. wind farm.

The five-turbine Block Island Wind Farm is capable of producing just a quarter of the energy as the proposed Skipjack Wind Farm and took almost a decade to bring to fruition, said Chris van Beek, president of Deepwater, who discussed the project at an event hosted by Business Network for Offshore Wind in Linthicum Heights last week that also featured a presentation by US Wind.

"The problems we had, we were able to handle them because it was small," van Beek said. "I think we start small and prove to the industry that a wind farm can be built and is possible, and I think that's more important than the size of the project."

The Skipjack project also calls for manufacturing operations at Sparrows Point and several hundred construction jobs.

Both companies would establish operations and maintenance offices in Ocean City.

Regardless of which developer Maryland regulators chose, labor unions say the project could be a lifesaver for trade workers who have struggled to find jobs as manufacturing declined in Maryland.

"The promise is enormous for our ready and willing, skilled ironworking workforce and apprenticeship program," said William Beckman, a representative of the Ironworkers Local 5, in testimony submitted to the public service commission. "We will all thrive with exciting new economic development projects that can revive our great city."

Despite such promise, cost remains a concern among consumer advocates. Maryland People's Counsel Paula Carmody, whose office represents residential utility consumer interests, worries that the projects could end up being more costly and a bigger burden to consumers than projected.

"This is a cost impact what that risk or impact might have on the rates they pay in the future, that's what we're talking about," Carmody said. "What we are taking a look at is the level of uncertainty in those projections."

sarah.gantz@baltsun.com

twitter.com/sarahgantz

View original post here:

Maryland takes next step toward offshore wind - Baltimore Sun - Baltimore Sun

To read the complete fleet status report of March 10, 2017, click here.

1. Class: Jackups

Year

Built

Spec.

Feet/K feet

Contract

End

Current

Day rate

Location

Rate at 0 revenue

1982/2006

mid 7/17

76

[NDC ZADCO]

UAE

M1161

1980

Early 4/18

62

[Dynamic Drilling/ONGC]

Bareboat chartered

India

B152

1982/2004

Late 11/17

81

[NDC]

UAE

(L1112)

Noble Ed Holt

1981/2003

Late 10/18

38

[Dynamic Drilling/ONGC]

Bareboat chartered

India

L786

1983/1998

[Dynamic Drilling/ONGC]

Bareboat chartered

India

Prospector 5

6/2014

JU 2000E

HS-HE

218

[Total]

UK NS

Sold to SinoEnergy

B 391

1981-2001

[Centrica]

UK NS

4-wells

JU 2000E

HS-HE

113

Swap with C461

[ONE]

NL

Sold to SinoEnergy

3. Prospector Offshore HE-HS Jack-up new build.

Name

Year built

Spec.

Feet/K feet

Contract

End

Information

Prospector 6

Delayed

JU 2000E

HS-HE

Prospector 7

delayed

JU 2000E

HS-HE

Prospector 8

delayed

JU 2000E

HS-HE

Note: The company has the option to delay the delivery of Prospector 6. The three rigs (P6, P7 and P8) are being constructed on a non-recourse basis with no parent company guarantees. They do not figure into the fleet status anymore.

Cold Stacked and Ready Stacked Rigs

Note: Ready stacked includes warm stacked, hot stacked and available (When the status or rig name is marked in blue you can click to get more information).

1981/2002

2011

Cold stacked

M842

M825

The company indicated a backlog of $242 million as of December 31, 2016 (now estimated at $195 million as of March 10, 2017):

Paragon Fleet Status

Commentary:

Paragon Offshore released another depressing FSR after a long silence. As a reminder, the preceding fleet status was released on October 18, 2016.

1 - The company managed to bag a small 4-well contract @$55k/d, in the North See for the JU B 391 in UK with Centrica. Additional backlog is $5 million.

2 - Prospector 1 and C461. Contract runs until mid 2/2018.

Executed rig-swap with ONE, transferring all remaining contracted days from the Paragon C461 to the Prospector 1. Anticipate 6 days off rate in March 2017 for planned upgrades; these days to be added to the end of the contract.

See the original post here:

Paragon Offshore - Complete Fleet Status As Of March 10, 2017 And Commentary - Seeking Alpha

Australia is not a country you'd expect to be investigated for crimes against humanity, but that's exactly what a group of human rights lawyers is asking the International Criminal Court to do.

The alleged human rights abuses took place far from Australia, in two offshore immigration detention centers in the South Pacific.

"Both of these are extremely remote Pacific islands," says Rebecca Hamilton, an Australian human rights lawyer who teaches at American University's Washington College of Law.

She's not kidding. One camp is on the tiny 10-square-mile island nation of Nauru. It's in the middle of Pacific about 25 miles south of the equator. There's nothing near it.

The other camp is on Manus Island, part of Papua New Guinea but several hundred miles off its coast in the Admiralty Islands.

Hamilton says Australia outsourced the detentions camps with one thing in mind: "They have been set up by the Australian government with the specific purpose of not letting any asylum-seekers onto the Australian mainland."

The offshore location of the detention camps also allowsAustralia to skirt its obligations as a signatory to theUnited Nations Refugee Convention.

Since 2001, the "Pacific Solution," as it's known, has been used on and off by Australian governments to intercept asylum-seekers at sea and transport them to the detention centers on Nauru and Manus Island.Hamilton says it's not a right or left issue. Australian governments across the political spectrum have used the detention camps.

"The rationale has been that making the boat journey to Australia is very dangerous and [the government]doesn't want people trying to make that journey," Hamilton explains."But the situations that these people are fleeing are incredibly dangerous as well and if they are making the calculationsthat it is worth them to try to at least seek asylum in Australia, then the Australian government has no right to say that they can't pursue that option."

The asylum-seekers on Nauru and Manus Island number around 1,250. Many have been there for nearly four years. The camp on Manus Island houses single men only. Nauru has women, families and children.

The 108-page brief submitted to the ICC on March 6 describesthe "harrowing practices of the Australian state and corporations towards asylum-seekers,"including long-term detention in inhumane conditions, physical and sexual abuse of adults and children and "epidemic levels" of self-harm among those held on the islands.

Hamilton says even though the camps are outside Australia and operated by people who are not Australian citizens, if the ICC decides to investigate and finds something, it's the Australian government who is still in the hot seat.

"Australian government officials, to the extent that they are aware of what is happening and are continuing to authorize it, they're absolutely on the hook," she says.

Hamilton says the evidence presented in the report to the ICC was gathered through interviews with former officials who have worked at the detention camps. "The Australian government has outsourced the running of these islands to private contractors. And as some of those people have resigned and left those positions, they have spoken out about the conditions that they've seen on the island."

The lawyers also drewon atrove of documentsleaked to The Guardian newspaperin August 2016. It comprised more than 2,000 incident reportsfrom inside the detention camp in Nauru that describedassaults, sexual abuse, self-harm attempts and child abuse. More than half of the incidents involved children.

It's not yet clear if the ICC will investigate the controversial camps. The court must first decide if it wants to do a preliminary examination. Hamilton says the standard for that is: "Is there a 'reasonable basis'for thinking that these allegations that are being made could be true?If there is and if the particular situation meets different legal standards for the court, then the court is able to start a preliminary examination."

Hamilton is hoping that the submission to the ICCwill help pressure the Australian government to shut down the camps and allow the asylum-seekers to resettle somewhere safe.

"There's a very strong constituency in Australia that is opposed to what the Australian government is doing here," she says."They're a minority but they have been on this issue for years and years and years and there are Australian human rights lawyers who have been pushing the Australian government to try to address this issue. But it hasn't yet hit a tipping point domestically."

She hopes that the submission to the ICC will get it there.

Read more:

Is the Australian government enabling crimes against humanity in its ... - PRI

Published on March 10th, 2017 | by Joshua S Hill

March 10th, 2017 by Joshua S Hill

The Scottish Government announced this week that it has approved a floating offshore wind turbine which would see eight 6-megawatt wind turbines installed off the coast of Aberdeen, in the countrys northeast.

Planning consent was granted by the Scottish Government for theKincardine Offshore Windfarm, a floating offshore wind farm which would be made up of eight 6-megawatt (MW) wind turbines. Set to be located approximately 15 kilometers off the south-east coast of Aberdeen, in Scotlands northeast, theKincardine Offshore Windfarm will be able to generate up to 50 MW enough to power the equivalent of around 56,000 homes, and prevent carbon dioxide emissions of around 94,500 tonnes per year.

Once operational, this pioneering, 50 MW Kincardine Offshore Windfarm will produce enough electricity to power almost 56,000 homes and will create jobs and investment across Scotland through the use of our supply chain, said Minister for Business, Innovation and Energy, Paul Wheelhouse, MSP. It will also cement our place as one of the worlds leading nations in the innovation and deployment of floating offshore wind. If the technology can be demonstrated at scale, it has huge potential to help Scotland meet its energy needs and to develop a supply chain that can service opportunities elsewhere in Europe and in markets such as South East Asia and North America.

The project is also billed to create approximately 110 jobs during the assembly, installation, and throughout the ongoing operations and maintenance of the project.

According to Atkins, an engineering and project management consultancy which is working withKincardine Offshore Windfarm and which conducted the environmental scoping assessment, the project would be a pilot-scale demonstrator offshore wind farm utilising a semi-spar floating foundation technology, which will demonstrate the technological and commercial feasibility of floating offshore wind.

Floating offshore wind presents the possibility of opening up new avenues for how offshore wind projects can move forward, minimizing or outright removing constraints such as water depth. Currently, offshore wind farms are relegated to a sort of Goldilocks zone not too close to the shore, but not too far out to sea. The first part of that is obvious to many people complaining about offshore wind turbines ruining the view. However, the further out to sea you get the more expensive, dangerous, and difficult it gets to install and operate offshore wind turbines due to the depth of the seafloor and the violence of the weather.

Floating offshore wind farms could mitigate that, somewhat, by going even further out to sea and not having to worry as much about seafloor depth.

The continued development of floating turbines in Scotland is encouraging as it could enable us and other nations to secure even more clean power from offshore wind, said Lang Banks, director of WWF Scotland. One thing is clear, if we are to meet our future climate and energy targets we will certainly need both more onshore and offshore wind in the future.

With the right political support for offshore wind and other technologies, Scotland can remain on course to secure half of all its energy needs from renewable sources by 2030.

Scotland is home to approximately 25% of Europes offshore wind resource and we are now starting to build out projects which will harness this potential, addedLindsay Roberts, Senior Policy Manager at Scottish Renewables.Were also at the forefront of innovation in this exciting sector and projects like this one are part of a new chapter for our renewable energy industry.

Buy a cool T-shirt or mug in the CleanTechnica store! Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech daily newsletter or weekly newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.

Tags: Aberdeen, Atkins, floating, floating offshore wind, floating offshore wind farm, floating wind, Kincardine, Kincardine Offshore Windfarm, Scotland

Joshua S Hill I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.

Read more from the original source:

Scottish Government Approves 48 Megawatt Floating Offshore Wind Farm - CleanTechnica

Hearings starting Monday could determine whether Maryland becomes a leader in the development of offshore wind power in the United States.

The Maryland Public Service Commission will begin what could be two weeks of hearings on proposals from two developers to build wind farms in the Atlantic Ocean off Maryland. The two developers are competing for up to $1.9 billion in subsidies over 20 years, paid for by the state's electricity ratepayers, a crucial financing mechanism for developers to recoup the cost of building the massive wind farms.

The commission is expected to decide whether to move forward with one by May 17.

Offshore wind energy, which is booming in Europe, offers significant potential to replace aging energy infrastructure along the East Coast, create jobs and bolster the economy.

The federal government has leased thousands of acres off the East Coast to be developed into wind farms, but the industry has yet to take off in the United States. Wind development has been hobbled largely by its cost as well as by regulatory hurdles and opposition from politicians opposed to subsidizing energy, coastal residents worried about views and environmentalists worried about migratory birds.

Only one small offshore wind farm has been installed in the United States, just five turbines off Block Island in Rhode Island. But other projects are in the works off Massachusetts, New Jersey and North Carolina.

If Maryland successfully becomes one of the first states to establish an offshore wind farm, the project could position the state to be a leader in the industry and serve as a hub for the contractors who could service future offshore wind farms up and down the East Coast.

"The opportunity Maryland has is huge," said Liz Burdock, executive director of the Business Network for Offshore Wind, a national advocacy group. "Where the infrastructure goes into place, where first companies set up, will be the base for where the rest of the industry is served."

Maryland has set a goal of getting a quarter of the state's power from renewable sources by 2020. Of that, up to 2.5 percent must come from offshore wind.

To meet those goals, utility companies such as Baltimore Gas & Electric Co., will be required to buy energy credits from offshore wind farms, solar companies and other renewable energy producers.

To encourage development in offshore wind, state lawmakers in 2013 approved legislation that will allow energy companies to pass on the cost of the offshore wind credits to ratepayers. Under the law, residential power bills could go up $1.50 a month and businesses could pay up to 1.5 percent more, to support an offshore wind project once it is up and running.

The Maryland Public Service Commission will decide how much utilities should pay for the offshore energy credits and from which project, essential determining which might get built.

"Maryland wants to be a leader in renewable energy and wants to have more homegrown renewable energy," said James McGarry, a policy director for Chesapeake Climate Action Network, an environmental nonprofit in Takoma Park. "Offshore wind is potentially the biggest untapped source of homegrown renewable energy."

The two proposals under consideration are from US Wind, a Baltimore-based subsidiary of Italian energy and construction giant Toto Holding SpA, and Deepwater Wind, the Providence, R.I. -based developer of the only wind farm off the U.S. coast.

In 2014, US Wind won a federal auction for the leases of two offshore wind sites off the coast of Ocean City. The company wants to build a 750-megawatt wind farm with 187 turbines on the 80,000-acre site. The project would be built in three stages, with the first capable of creating 250 megawatts of wind power. The first stage could be complete by 2020 and the entire project could be built by 2022.

The first stage of the project would cost about $1 billion, said Paul Rich, US Wind's director of project development. He declined to share the proposed impact to ratepayers' energy bills.

Rich said he thinks the company's "go big" approach is Maryland's best bet for establishing itself as a long-term industry leader.

The plan calls for manufacturing facilities at Sparrows Point in Baltimore County that would be run by contractors who will make the massive turbines and bases they sit on. Rich envisions those facilities becoming the go-to resource for future projects up and down the East Coast.

All told, the project could create 5,000 construction, fabrication, electrical and support jobs, he said.

"We are trying to embrace a vision," Rich said. "This will be the Silicon Valley of industrial activity for the offshore wind industry for the whole East Coast."

Meanwhile Deepwater Wind is proposing a smaller, $720 million project that executives called the "right size" for Maryland.

The Skipjack Wind Farm would be located on a 96,400-acre site about 17 nautical miles northeast of Ocean City, actually in waters off Delaware. The company has proposed building 15 turbines, capable of producing 120 megawatts of energy, with the possibility of adding more turbines in the future. Construction could start in 2020 with the farm operational by 2022.

Deepwater has proposed a price for its energy that would cost residential customers 34 cents a month, said Deepwater CEO Jeff Grybowski.

Deepwater acquired the site's lease last year from utility company NRG Energy. The lease had been among the first granted by the federal government in 2012, but NRG's planned wind farm stalled due to financial constraints.

Deepwater leaders said their more conservative proposal is based on their experience developing the only other offshore U.S. wind farm.

The five-turbine Block Island Wind Farm is capable of producing just a quarter of the energy as the proposed Skipjack Wind Farm and took more than a decade to bring to fruition, said Chris van Beek, president of Deepwater, who discussed the project at an event hosted by Business Network for Offshore Wind in Lithicum Heights last week that also featured a presentation by US Wind.

"The problems we had, we were able to handle them because it was small," van Beek said. "I think we start small and prove to the industry that a wind farm can be built and is possible, and I think that's more important than the size of the project."

The Skipjack project also calls for manufacturing operations at Sparrows Point and several hundred construction jobs.

Both companies would establish operations and maintenance offices in Ocean City.

Regardless of which developer Maryland regulators chose, labor unions say the project could be a lifesaver for trade workers who have struggled to find jobs as manufacturing declined in Maryland.

"The promise is enormous for our ready and willing, skilled ironworking workforce and apprenticeship program," said William Beckman, a representative of the Ironworkers Local 5, in testimony submitted to the Public Service Commission. "We will all thrive with exciting new economic development projects that can revive our great city."

Despite such promise, cost remains a concern among consumer advocates. Maryland People's Counsel Paula Carmody, whose office represents residential utility consumer interests, worries that the projects could end up being more costly and a bigger burden to consumers than projected.

"This is a cost impact what that risk or impact might have on the rates they pay in the future, that's what we're talking about," Carmody said. "What we are taking a look at is the level of uncertainty in those projections."

sarah.gantz@baltsun.com

twitter.com/sarahgantz

Originally posted here:

Maryland takes next step toward offshore wind - Baltimore Sun

The Turnbull government is contemplating measures to boost the revenue it collects from offshore oil and gas projects. Photograph: AFP/Getty Images

The federal government could gain revenue of US$4.8bn ($6.4 bn) from Chevrons Gorgon gas project between now and 2030 if it made offshore gas projects subject to a royalties regime, according to research from a Monash University academic.

The Turnbull government is contemplating measures to boost the revenue it collects from offshore oil and gas projects after collections under the petroleum resource rent tax plunged after 2012-13, and crude oil excise collections fell by more than half.

The Tax Justice Network has used an inquiry the government is conducting into the PRRT to argue that it should impose a 10% royalty on all offshore oil and gas projects in Australia to ensure taxpayers start getting a fair return on their natural resources.

Monash University lecturer Diane Kraal, who is conducting research on integrated natural gas-to-liquids projects that extract from basins in commonwealth waters, also favours the imposition of a royalties regime for offshore oil and gas.

She says that in the absence of a royalties regime, the Gorgon project will not pay any PRRT until at least 2030.

Kraal says the PRRT is clearly not working as intended for gas, and imposing commonwealth royalties for offshore projects would be one way of addressing the problem, without creating double taxation.

Royalties are fully credited from any PRRT payment, so there is no double taxation, she says.

Gas producers have used the review to dig their heels in over changes to the PRRT.

The Australian Petroleum Production and Exploration Association (APPEA), the peak national body that represents companies engaged in oil and gas exploration and production operations in Australia, has told the inquiry investment is at risk if the system is overhauled.

Any changes that lead to increased imposts under the resource taxation system will damage the ability of Australia to attract projects and thereby diminish the capacity to create sustainable taxation revenue streams for future generations, APPEA says in its submission to the PRRT review.

But with the budget in need of more revenue, the government has made it clear it will use the review process to determine how to achieve better rates of return. Reports this week suggest the treasurer, Scott Morrison, is contemplating several options, including imposing a minimum resource tax.

On Friday, the government also left open the option to pursue a separate policy change that the gas industry is opposed to creating a domestic gas reservation to ensure a percentage of gas remains onshore for domestic use.

The prime minister, who will meet gas executives next week to address a looming shortage of gas supply, refused on Friday to rule out reserving gas for domestic industry.

The Australian Energy Market Operator warned this week that New South Wales, Victoria and South Australia would face gas shortages from the summer of 2018-19. It said the tight domestic gas market would have flow-on effects, including rising electricity prices, that could threaten the financial viability of commercial and industrial businesses.

Last year, the Australian Competition and Consumer Commission warned the government against adopting a reservation policy be it a percentage of reserved gas supply, export controls or a national interest test to try to address the problem of gas shortages in Australias eastern states.

The ACCC said gas reservation policies seek to shield domestic users from the effects of linking to export markets.

In the short term, such policies may reduce prices for domestic users as additional gas is forced onto the domestic market above efficient market demand, the competition watchdog said. These artificially reduced prices weaken the economic incentives for further gas exploration and appraisal.

The gas industry has rejected arguments it should face a royalties regime for offshore projects.

Kraal said on Friday she had analysed all the industry submissions to the PRRT review. It is clear that the petroleum industry has closed ranks and is calling for no change to resource taxation, such as the PRRT, she said.

But she contended the industry had not supplied any substantive evidence to the inquiry to support the idea that the PRRT was operating as intended, and providing equitable returns to the public from current gas projects.

No industry submission has fully addressed the range of issues put forward by the PRRT review, she said.

Kraal expressed hope that the review would countenance a wider range of views than just those of the industry because the Australian public was entitled to have adequate rates of return on resources development.

She said she was a supporter of LNG development, and it was obvious Australia should welcome foreign investment, but the hanging question is who is shaping our policy on resource taxation?

Continued here:

Offshore gas project royalty would reap billions for government, report says - The Guardian

March 10th, 2017 Donal Scully Americas, Gas, Offshore 0 comments

US oil and gas firm Anadarko Petroleum has made a discovery offshore Colombia with a gas find at the Purple Angel prospect in deep waters on the countrys Caribbean coast.

Anadarko runs the Purple Angel prospect as a joint venture with Colombias largest oil company Ecopetrol. Each firm has 50% stakes in the block.

The new discovery is 4.7 kilometres from a previous find made in July 2015 at the Kronos-1 well.

Woodlands, Texas-based Anadarko has also announced plans for drilling seven deep-water development tiebacks in the Gulf of Mexico this year, part of its ongoing interest there.

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.

Go here to see the original:

Anadarko makes gas find offshore Colombia - Splash 247

This is a traditional article dedicated to results of the earnings season for offshore drillers. Here, we will discuss the situation in the oil market, key trends in the offshore drilling industry and individual offshore drillers whose stocks trade at major U.S. stock exchanges.

Oil

Back on February 22, I wrote that OPEC had little time to push Brent oil (NYSEARCA:BNO) over $57.50 before the inevitable downside correction. The rationale for this was simple - there were too many long speculative bets in oil without a corresponding increase in oil prices. Recent inventory data was the last straw that broke the camel's back, and both Brent and WTI (NYSEARCA:USO) experienced big sell-offs.

This move cemented $57.50 for Brent and $55 for WTI as key resistance levels. Should prices come back to these levels, you can expect increased selling due to profit taking, hedging of outright shorting. Oil will need a significant fundamental catalyst to break through this resistance. Long bets by speculators proved insufficient to push oil above the major resistance line.

This is very bad news for all offshore drilling companies. Previous oil price levels were not good enough to increase contracting activity as highlighted by earnings and fleet status reports. The new downside move means that oil will spend at least some more time under $57.50. Also, such fast moves are negative for oil producers' confidence in price stability. Unless oil majors become confident that prices will stay at $55 - $60 (at minimum!) per barrel, all incremental money will go to short-cycle projects like shale.

The move is also bad for the OPEC deal. Compliance to the deal heavily depends on the cartel's ability to sustain prices. Should prices go lower, participants will realize that they have done everything wrong - provided a lifeline for struggling U.S. shale producers, lost market share and did not get better prices.

Some observers expect that OPEC will be able to negotiate an even bigger cut if they fail to improve the pricing environment, but I expect the exact opposite. If OPEC deal fails to improve prices and the cartel finds itself selling less oil at the very same prices that were before the deal, the deal will fall apart. There will be no reason to subsidize U.S. shale and other producers at the expense of OPEC countries.

Oil is oil, so there's a lot of volatility ahead. The key takeaway for offshore drilling industry is that OPEC deal was no silver bullet and the industry will have to wait even more for recovery.

Key highlights from the earnings season

Long-term contracts at rock-bottom rates started to emerge. Examples include Noble Corp.'s (NYSE:NE) and Ensco's (NYSE:ESV) contracts with Saudi Aramco. Judging by drillers' comments during conference calls, the industry expects there's more to come. While contracts are important to provide financial visibility in the future, they tie up the fleet at rates that contribute nothing or next-to-nothing to the bottom line.

There is no mass scrapping. The chart from recent Atwood Oceanics (NYSE:ATW) presentation highlights that pace of scrapping increased, but not dramatically:

Most companies continue to clutch at straws and hang on to their rigs as long as they can. Another problem with scrapping rigs is the accompanying impairment on the balance sheet - drillers don't want to scare investors (and potentially violate covenants!) with real numbers. Ocean Rig (NASDAQ:ORIG), which is preparing for restructuring, showed how hard can it get by writing off 60% of value of its modern (!) fleet.

Most management teams portrayed a better future, but they had no facts to back up their optimism. More calls, more talks, more everything with clients - that's how most drillers described the situation after the OPEC/non-OPEC deal. We have heard this before. You can check my article on the results of the Q3 2016 earnings season, where I highlighted that drillers mentioned increased customer inquiries. In my view, words mean nothing until we see tangible evidence.

Restructuring talks proved to be extremely complicated. Suddenly, Seadrill Partners (NYSE:SDLP) turned out to be not immune to Seadrill (NYSE:SDRL) restructuring, presenting a wonderful short opportunity. Seadrill itself spent a whole year to come up with a poor proposal which was based on unrealistic expectations. There's little surprise that the company still has to work on a viable deal and Chapter 11 is already in sight. Pacific Drilling and Ocean Rig restructuring talks also continue. Faced with unprecedented downturn, creditors try to find a scheme that will save their money, but it's not easy (or even possible) given the current market situation.

Floaters remain dead money. Oil price is not high enough to improve demand for floaters, period. It's safe to say that you can forget about any material improvements in the segment with a sub-$55 oil.

Jack-ups are better, but rates are low. Jack-ups are getting some work, but the jack-up overcapacity is so huge that dayrates are glued to the very bottom. I see no catalysts that can push rates from the bottom in the near term.

Oil majors have already chosen their strategy for 2017. They will preserve their balance sheets and allocate money to shale. The wild card was that oil breaks through $57.50 with a vengeance, continuing the post-OPEC deal upside, but this did not happen. While this is early in the year, I already expect that any improvements are postponed to 2018. The reason for this is that oil producers need stable prices at higher levels to increase their offshore exposure. "Stable" means that prices spend months above $57.50 or even $60, and we are not even there yet.

Let's now turn to individual names.

Atwood Oceanics

While Atwood Oceanics does not have immediate cash problems, especially after equity issue at the beginning of the year, the company's backlog remains a big problem. Atwood's shares have already corrected significantly from the $14 level, but more downside may follow if oil prices fail to rebound swiftly. I continue to believe that the situation remains dangerous for the company.

Diamond Offshore Drilling (NYSE:DO)

Shares of Diamond Offshore Drilling are close to the key support level. As I wrote in the comments section of my previous article on the company, I believe that its shares may be an interesting bet here if the stock breaches the support to the downside and then immediately returns above $15. If you are more optimistic than me on oil prices, Diamond Offshore Drilling's current level may be suitable for you.

Ensco

The $12 level proved to be a wall for Ensco's shares, and now they are correcting together with oil prices. Ensco is definitely part of the survivor group, but current momentum looks strong and the stock needs to stabilize first before any upside is possible.

Noble Corp.

Troubled by the usual problem - lack of specific catalysts - Noble Corp. shares are slowly gravitating towards November lows. I expect a wide range trading for Noble Corp. stock and I believe that it may be attractive for a range play when the low end of the range is established. Judging by what we see on the fundamental (no improvement in the market situation) and the technical (sell-off across all offshore drillers, current support does not look strong) fronts, entering at $6 may be premature.

North Atlantic Drilling (NYSE:NADL)

Avoid North Atlantic Drilling. The probability of Seadrill restructuring being beneficial for North Atlantic Drilling is close to zero.

Ocean Rig

Avoid Ocean Rig. After the recent write-off, shareholder equity became negative which highlights that there is no value left in common shares and the company knows it.

Pacific Drilling (NYSE:PACD)

Avoid Pacific Drilling. Market for floaters is awful and the debt is huge. Creditors will need to take significant haircuts to make the company a viable enterprise again, which means that common shareholders stand to receive nothing in the upcoming restructuring.

Rowan (NYSE:RDC)

Rowan continues correction along with other offshore drilling names. This is one of the best companies in the industry that receives little interest from retail investors compared to battleground stocks like Seadrill. The next support level for Rowan is at $15, it will be interesting to see whether the stock will be able to hold at this level. While the company right now is hardly a momentum play, it should be closely watched for buying opportunities.

Transocean (NYSE:RIG)

I believe that Transocean was a bit overhyped following the OPEC/non-OPEC deal, so correction was almost inevitable. The company has a whole fleet of stacked rigs, and I believe that many of them won't work again. I see Transocean as a survivor and I believe that it may present a buying opportunity after the current sell-off.

Seadrill

Seadrill is only good for daytrading now. The Chapter 11 possibility is real. Should the company file for bankruptcy, shareholders will be lucky to get anything at all. Unless you are a real gambler, you'd be better off watching Seadrill from the sidelines.

Seadrill Partners

The easy short is over. At the same time, uncertainty will lead to increased volatility in the coming days and weeks. Those willing to grab Seadrill Partners units after the big sell-off should keep in mind that the company may end up being part of Seadrill restructuring, which would be a real catastrophe for Seadrill Partners unitholders. Risks are very significant.

Bottom line

I see no evidence of recovery. I believe that offshore drilling stocks remain a vehicle for momentum plays - both long and short. Those willing to commit to offshore drilling for the long-term (for whatever reason) will be better off sticking to best players and avoiding gambling with battleground stocks like Seadrill and Ocean Rig. The industry is in bad shape and mistakes will cost dearly for investors.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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.

Additional disclosure: I may trade any of the abovementioned stocks.

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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Offshore Drilling In Deep Trouble As Oil Dives Lower - Seeking Alpha

LONDON Subsidy costs for British offshore wind farms are likely to fall below that of new nuclear plants in next month's government auction, German firm Siemens' head of its British offshore wind turbines business told Reuters.

Britain's government is under pressure to bring down users' electricity costs at the same time as subsidizing low-carbon generation to help meet its carbon emission reduction targets and plug a looming supply gap.

The next government auction setting prices for new renewable power projects will open in April and Clark MacFarlane, Siemens managing director for offshore wind, said this could see offshore wind costs fall below new nuclear for the first time.

"I predict the price for offshore wind in the upcoming auction will be lower than that given to Hinkley," he told Reuters in an interview.

"The price will keep coming down, as we find better logistic solutions, new grid solutions, as well as bigger turbines, he said.

French utility EDF was awarded a contract which guarantees the new Hinkley C nuclear power station will get a price of 92.5 pounds ($112.50) per pounds/megawatt hour (MWh) for the electricity it produces, which is more than double the current wholesale price of electricity.

The cost of producing electricity from wind farms off the coast of Britain has already fallen 32 percent in the past four years, and averaged around 97 pounds per megawatt-hour (MWh) in the 2015-2016 financial year an industry report said earlier this year.

MacFarlane said increasing the size of wind turbines means automatically cutting the number of turbine towers and foundations needed to produce the same amount of electricity, thereby reducing costs.

Siemens produces turbines for British offshore wind projects at its 310 million-pound ($380 million) manufacturing plant in Hull, northeast England, including Dong Energy and Macquarie's Race Bank project off the nearby coast.

The plant's current order book will keep it busy until 2019, MacFarlane said, adding that the firm was confident of securing future deals with offshore project developers who are successful in the new government auctions.

In the longer term Siemens hopes to also export turbines from the plant across Europe but has said this could depend on the outcome of Britain's negotiations to leave the European Union.

"If we don't have tariff exemptions for exports then that would be a concern," MacFarlane said.

($1 = 0.8222 pounds)

(Reporting By Susanna Twidale; Editing by Greg Mahlich)

Utility crews reinforced by teams from several Midwestern states scrambled on Thursday to remove fallen trees and repair downed electric lines strewn across Michigan the day after a record windstorm that claimed two lives and left at least 1 million customers without power.

LOS ANGELES New U.S. solar installations nearly doubled last year, but slowing demand for both residential and large-scale systems, falling panel prices and concerns about looming federal tax reform are still dampening investor appetite for the sector.

SANTIAGO SunPower Corp has put a large solar plant in Chile up for sale, according to two sources with knowledge of process, as the second largest U.S. solar panel maker seeks to cut costs across the globe.

Read the rest here:

UK offshore wind power subsidies set to drop below nuclear: Siemens - Reuters

Offshore wind energy has been growing like crazy in the last few decadesso much so that there's even talk of serious talk of multi-gigawatt offshore wind farms in the US in the not too distant future.

But offshore wind has so far been limited to areas where the seafloor is relatively shallow, and where it's easy to build foundations for these gigantic turbines.

Floating wind turbines are different. Instead of using fixed foundations, they are anchored to the sea floor using cables. And that means they can be located in deeper waters, opening up many more areas where wind conditions are favorable and concerns about views and/or bird migration routes are less relevant. Alongside opening up new areas for development, the other major advantage of floating turbinesonce they are being developed at scalecould also be reduced costs. Offshore wind costs are already plummeting compared to expectations, and some advocates argue that floating turbines will be even more economical. The foundations areapparentlymore expensive to manufacture, but much easier to installthus saving time in the water, and because their movement with the waves should reduce vibrations, they may also need less maintenance too.

Up to now, the largest project approved was the 30MW Hywind floating wind farm off the coast of Scotland, but Business Green reports that Hywind is now going outgunned by the 50MW Kincardine development, which will be located 15km off the coast of Aberdeen.

Consisting of eight turbines, developers say the farm will have the capacity to power 56,000 homes. And while I couldn't find details of when the farm is expected to be operational, once it is it should serve as proof of concept for much larger farms in Europe, Asia and North America too. As I mentioned in my previous article on Hywind, Carbon Trust has estimated that floating turbines could provide 8 to 16GW of offshore wind capacity in the UK alone by 2050. Reaching that goal would mean scaling up these technologies fast.

More:

Large-scale floating offshore wind power is finally here - Treehugger

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The International Monetary Fund in Washington is shifting some of its IT work overseas, and somewhere between 100 and 200 IT workers are impacted by this change.

The work is being taken over by India-based IT managed services provider L&T Infotech, and the change was announced to the staff last year. The transition, which involves training L&T employees, is continuing through the end of this year. IMF IT workers are being to encourage to stay by means of an incentive package.

The affected IT workers are all third-party contractors. Some of the contractors have been working at the IMF for five and 10 years or longer, and are viewed as staff for most purposes.

"Some people are just mad," said one affected IT employee, who requested anonymity. "Why are they bringing people in from overseas to do these jobs?" Computerworld reached several IMF IT workers.

The affected areas include networking, security, servers and desktops.

L&T Infotech, is an H-1B dependent firm, meaning 15% or more of staff works on temporary visas. IMF IT workers reached weren't certain if the contractor's employees were on a visa. One IT worker said that Labor Condition Application notices from the contractor, indicating the salary and workplace of a visa worker, had been posted in their office.

The employees say that a number of IT workers have left for other jobs. L&T is expected to offer jobs to a small number.

The IMF is based in downtown Washington and its IT operations are located about three blocks from the White House.

One of the third-party contractors that supplies IT workers to the IMF is TEKsystems. Computerworld asked whether it will find the workers new jobs. Nathan Bowen, TEKsystems spokesperson, in a written statement said: "As long as the IMF employees working under contract from TEKsystems are in good standing and have expressed interest in continuing to find employment through TEKsystems, then our recruiters will actively pursue contracts that fit their needs."

Computerworld contacted the IMF by email and phone, but the organization did not respond to a request for comment. But the IMF did release an unrelated statement Thursday afternoon describing IMF Managing Director Christine Lagarde's meeting with U.S. Treasury Secretary Steven Mnuchin, telling him that the IMF was interested in creating jobs.

This statement said, in part, "Madame Lagarde expressed the IMF's desire to continue close engagement with the U.S. to encourage policies that will promote growth, stability, and job creation in the U.S. and globally."

Senior Editor Patrick Thibodeau covers Internet of Things, enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld.

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IMF moving IT jobs to offshore firm | Computerworld - Computerworld