Daily Archives: May 17, 2017

Houston-based GulfMark Offshore, which runs support vessels for offshore drilling, said Tuesday that it plans to to file for bankruptcyafter reaching a agreement with bond holders to convert debt to equity.

The reorganization, which was first reported in the Houston Business Journal, would help the company shed $430 million in debt. Shareholders will have .75 percent of the equity in the reorganized company. GulfMark said it expects to file for Chapter 11 bankruptcy by May 21.

We are confident that this step will position GulfMark to seize opportunities as the downturn continues and in the eventual market recovery, saidQuintin Kneen, GulfMarks CEO, said in statement.

While operators drilling in West Texas shale plays have managed to turn a profit with lower oil prices, the offshore drilling industry has struggled to recover asoil prices hover at or below $50 a barrel.

Earlier this month at the Houstons annual Offshore Technology Conference, the industrys largest gathering, executives from large companies discussed the need to cut costs in offshore operations. Some companies, like British oil company BP, said they can profit with lower- for- longer oil prices. But smaller offshore drillers and service companies havent managed to profit, conference goers said.

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GulfMark Offshore plans bankruptcy filing - FuelFix (blog)

5/16/2017

ABERDEEN -- 2H Offshore, riser and conductor specialists in subsea services group Acteon, is pleased to announce the launch of the STREAM (STeel Riser Enhanced Analytics using Measurements) Joint Industry Project (JIP), which will see 2H Offshore work with operators to find efficiencies for the industry.

STREAM JIP logo. Source: 2H Offshore.

STREAM aims to provide a measurement-based foundation for steel catenary riser (SCR) modelling to allow for accurate fatigue assessment. SCRs have been widely used in the deepwater offshore industry due to their service reliability. However, field measurements indicate that riser fatigue damage is often over predicted at the critical touch down region, which can lead to higher riser costs for the industry.

Full-scale field data from six deepwater SCR systems has been secured from STREAM JIP participants, including four major operators. 2H will apply its proven riser response data analytics methodology to benchmark design, identify gaps and derive calibrated modeling parameters. The results will benefit the future design and life extension of riser systems.

Himanshu Maheshwari, 2H Offshore Senior Project Manager, said: The modern subsea market is evolving, with a need for smarter, more efficient solutions. At 2H we are leading these changes by combining our domain expertise with the intelligent use of data.

Data is critical to bridge the gap between numerical analysis and actual response in the field for deep water SCRs. The STREAM JIP will provide a platform for operators to work together to achieve an industry consensus on optimal design parameters.

Currently, four major oil and gas operators have agreed to participate in the JIP. 2H also invites more interested industry partners to join the JIP and in turn benefit from field data insights.

Read more from the original source:

2H Offshore launches JIP to drive intelligent efficiencies - WorldOil (subscription)

By Ginger Gibson | WASHINGTON

WASHINGTON Major U.S. multinationals are pushing the Trump administration to deepen the tax break it has already tentatively proposed on $2.6 trillion in corporate profits being held offshore, a key piece in Washington's intricate tax reform puzzle.

As President Donald Trump tries to deliver on his campaign promise to overhaul the tax code, lobbyists for technology, drug and other manufacturers are working with officials behind closed doors, six lobbyists working with various industries told Reuters.

In line with tax cuts already embraced by Republicans in the House of Representatives, the lobbyists said they are telling the White House and Treasury Department that if companies are forced to bring home, or repatriate, foreign earnings, they want a sharply reduced tax rate.

The lobbyists are making an aggressive case that cutting the tax rate on offshore profits to 10 percent from 35 percent, as the administration has indicated it may favor, is not enough.

Rather, the lobbyists said they want a lower, bifurcated rate of 3.5 percent on earnings already invested abroad in illiquid assets, such as factories, and 8.75 percent on cash and liquid assets.

During the 2016 presidential campaign, Trump proposed setting the rate at 10 percent, and argued it could be used to raise tax revenue to pay for tax cuts or infrastructure.

Discussion of hard numbers in the long-running repatriation debate may indicate tax reform is advancing on Trump's slow-moving domestic policy agenda. Or it may just be lobbyists trying to set the early framework for a long slog ahead, which could be adjusted if they get concessions elsewhere.

"For us, its how you create a tax environment where you give business long-term certainty," one lobbyist said.

The changes being discussed are part of larger tax reform, another lobbyist said: "Our international tax system is out of whack with the rest of the world. This system is not sustainable."

LATEST PUSH IN LONG CAMPAIGN

The lobbyists' demands represent the latest effort in a push by corporate America that has been under way since 2004-2005, the last time Washington let multinationals pay only a small fraction of the taxes due on their foreign profits.

Repatriation and comprehensive tax reformare important to the economy, Apple Inc (AAPL.O) CEO Tim Cook said earlier this month on CNBC. "The administration ... they're really getting thisand want to bring this back and I hope that that comes to pass," he said. Apple held $239.6 billion of cash and securities offshore as of April 1.

Under current law, U.S.-based corporations are supposed to pay 35-percent income tax on profits worldwide. But companies can defer that tax on active profits left outside the country.

The deferral rule has incentivized multinationals to park profits offshore and about $2.6 trillion in earnings is being held overseas by more than 500 U.S. companies, according to Audit Analytics, a corporate research firm.

Nearly a third of that is held by 10 companies, including Apple, Microsoft Corp (MSFT.O), Pfizer Inc (PFE.N) and General Electric Co (GE.N), the firm said. All four of those companies declined to comment.

These companies and hundreds of others could bring their foreign profits into the United States at any time, but they do not in order to avoid paying the 35-percent tax due.

If the $2.6 trillion overseas were repatriated at once, two things would happen. First, Washington would get a big jolt of tax revenue. Second, repatriated profits not collected by the Internal Revenue Service could be put to use in the economy.

As the law stands, tax-deferred profits can be held offshore indefinitely. The result of that has been companies biding their time, claiming their profits are "trapped" offshore while lobbying for a repatriation tax cut. The last time they got one was in 2004-2005 under former President George W. Bush, whose administration let multinationals voluntarily repatriate profits at a 5.25 percent tax rate.

At the time, Bush tried to extract promises from companies that they would dedicate repatriated funds to investments in new plants and other job-creating projects.

But in a 2011 follow-up study, a Senate committee concluded the Bush repatriation tax "holiday" cost the Treasury at least $3.3 billion in net revenue over 10 years and "produced no appreciable increase in U.S. jobs or domestic investment."

Rather, the repatriated funds largely went to shareholder dividends and executive bonuses, the committee said.

The repatriation tax break now being discussed differs from Bush's: repatriation would not be voluntary, but mandatory, so foreign profits would have to be brought home.

In addition, lobbyists said they have talked to the administration about ending deferral and exempting foreign profits from taxation. The administration has floated this as an option. Lobbyists said there has been discussion about limiting that exemption to 95 percent of repatriated foreign earnings.

(Editing by Kevin Drawbaugh and Bill Rigby)

Puerto Rico on Wednesday willface investors for the first time in a bankruptcy court, as it kicks off the biggest and most divisive debt restructuring in U.S. public finance history.

WASHINGTON The Trump administration's top trade officials hope to keep the North American Free Trade Agreement as a trilateral deal in negotiations with Canada and Mexico to revamp the 23-year-old pact, senators said on Tuesday.

WASHINGTON/RIYADH When U.S. President Donald Trump meets Saudiprincesin Riyadh on Saturday, hecan expecta warmer welcome than the one given a year ago to his predecessor Barack Obama, who Riyadh considered soft on arch foe Iran and cool toward a bilateral relationship that is amainstay of the Middle East's security balance.

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US companies push hard for lower tax rate on offshore profits - Reuters

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May 16, 2017, 8:01 AM EDT May 16, 2017, 11:20 AM EDT

Scottish judges paved the way for as much as 10 billion pounds ($13 billion) to be invested in offshore wind power by overturning a ruling that said projects may kill too many birds.

Planning permission should move forward at four wind farms being developed by SSE Plc, Mainstream Renewable Power Ltd., Fluor Corp. and SDIC Power Holdings Co., according to the ruling by three judges at the Inner House at the Court of Session in Edinburgh on Tuesday.

They said a judge in the Outer Court was wrong to revoke consent in July for the wind farms, that may create as much as 2.3 gigawatts of new capacity off Scotlands east coast. The earlier ruling asserted that Scottish ministers didnt properly assess how the projects would threaten migratory seabirds such as the puffin.

The earlier decision strayed well beyond the limits of testing the legality of the process,according to the ruling. Matters of scientific fact and methodology which, whatever the judges own particular skills may be, are not within the proper province of a court of review.

Scotlands government welcomed the decision by saying it remains strongly committed to the development of offshore wind energy, according to an email from Minister for Business, Innovation and Energy Paul Wheelhouse. Offshore wind has a key role to play in our fight against the threat posed by climate change to both our society and our natural environment, he said.

Mainstream said it would now seek to develop the 2 billion pound Neart Na Goithe offshore wind farm as quickly as possible, according to a separate statement. The project has a contract with the U.K. government for a subsidy of 114 pounds a megawatt hour.

The Royal Society for the Protection of Birds, which brought the original case against the wind farms, said the projects could be among the most deadly windfarms for birds anywhere in the world.

RSPB Scotland is, of course, hugely disappointed by todays Inner House judgment, said Stuart Housden, director RSPB Scotland, in an email. Combined, these four huge projects threaten to kill thousands of Scotlands internationally protected seabirds every year, including thousands of puffins, gannets and kittiwakes.

The decision will boost investor confidence in the U.K.s emerging offshore wind industry, as the country hosts its latest subsidy auction, said Tom Harries, Bloomberg New Energy Finance analyst. Developing an offshore wind site in the U.K. is risky and costly enough already, without the added threat of retroactively losing an environmental permit.

Edward Black, a spokesman for SSE, said the company was delighted with the outcome of the appeal and will now consider the best options for the two Seagreen wind farms affected.

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Scottish Offshore Wind May Get Lift After Bird Ruling - Bloomberg

More than 100 members of Congress are urging the Trump administration not to open up the Atlantic or Pacific oceans for oil and gas drilling as part of the Interior Departments review of federal offshore policies.

In a letter released on Monday, the members said drilling in the Atlantic or the Pacific would imperil local economies based on fishing and tourism, which they said would both be threatened by the effects of a potential oil spill.

We do not believe that new oil and gas exploration or production activity in the Atlantic and Pacific Outer Continental Shelf (OCS) is compatible with the sustainable coastal economies on which so many of our constituents and communities depend, the members wrote.

As you conduct a review of our nation's existing oil and gas leases, we again strongly urge you to reject proposals to open the Atlantic and Pacific OCS Regions to new offshore drilling and exploration."

Democrats make up the bulk of the members signing the letter, though a handful of Republicans joined as well, including co-lead authors Reps. Frank LoBiondo (R-N.J.), Dave ReichertDavid ReichertHouse GOP not sold on Ryans tax reform plan Lawmakers push back against Trump offshore drilling review Here are the 20 Republicans who rejected ObamaCare repeal MORE (R-Wash.) and Mark Sanford (R-S.C.).

President Trump signed an executive order in April requiring the Interior Department to reconsider the five-year offshore drilling plan the Obama administration finalized last year. That plan did not include lease sales for the Atlantic, Pacific or Arctic oceans.

The Interior Department last week announced that it would consider allowing six companies to use seismic testing to assess potential oil and gas reserves in the Atlantic Ocean, though it will take years before any potential testing permit is issued.

Continue reading here:

Lawmakers push back against Trump offshore drilling review | TheHill - The Hill

Its a tiny island with a big claim to fame.

We, the smallest town in the smallest state in the United States, have the very first offshore wind farm and we should be so proud, Nancy Dodge of the Block Island Power Company Board said earlier this month.

Her enthusiastic comments came as Block Island turned off its diesel generators, and started using offshore wind power as its source of electricity. That switch officially happened on May 1 after years of planning and development.

This is the start of something much bigger and we will always be able to say Block Island was the first, added Jeffrey Grybowski of Deepwater Wind, the company leading the charge on the years long, multi-million dollar project.

That project involves five wind turbines spinning three miles off of the island.

An undersea cable connects the turbines to the mainland, providing power to some 17,000 mainland homes.

A separate cable then connects to Block Island, providing its residents with clean wind power as well.

Now with the first offshore wind farm up and running, Deepwater Wind is shifting its focus to other projects for New York and Massachusetts.

Massachusetts can build big projects that are not too far from where we are right now, and produce a lot of clean energy, and a lot of clean jobs doing it, Grybowski adds while standing on Block Island.

Deepwater Wind is just one of several companies envisioning hundreds of turbines off the Massachusetts coast, as Governor Charlie Baker asks utilities to incorporate offshore wind power into the states grid over the next two decades.

Were talking about projects that would be located 20 miles from the south coast of Massachusetts and maybe 15-16-17 miles from the closest point of the Vineyard or Nantucket, Grybowski, the CEO of Deepwater Wind, adds.

At that distance, he says, the turbines will only be visible from land if someone is looking for them.

Thats a key point Deepwater Wind reiterated several times, well aware of the fierce opposition Cape Wind has faced for years.

That project, not associated with Providence based Deepwater Wind, hopes to build more than a hundred wind turbines in Nantucket Sound, just a few miles off of Cape Cod and Marthas Vineyard.

Back on Block Island, distance to land was also an issue. Some residents, like Rosemarie Ives, say that their once pure views of the Atlantic will never be the same following the installation of the man-made turbines so close to shore.

Ives and others also protest the speed with which the Block Island wind project received regulatory approval.

It went so fast, through the federal process and the state process, says Mary Jane Balser, the owner of Block Island Grocery.

I cant even get a mowing permit from Coastal faster than they got the permits to put that wind farm in, she adds, referring to the Rhode Island Coastal Resources Management Council.

Opponents of the project, who overall still support a move to clean energy sources, point to political connections between Rhode Island and Deepwater Winds Chief Executive Officer as one possible reason for what they call a fast track.

Jeffrey Grybowski served as Chief of Staff to former Rhode Island Governor Donald Carcieri. He left his post just before the administration, in 2008, named Deepwater Wind Rhode Islands preferred developer of offshore wind power. By that time Grybowski was practicing corporate law at a firm representing Deepwater Wind. Grybowski later joined Deepwater in 2010.

Balser goes on to say she believes Block Island was chosen for the first in the nation wind farm because of its small, transient population.

There were bigger motives. Get the first one in the ground where youll have the least amount of legal opposition and then, wham, build on it everywhere else, she says.

I feel the whole financial picture of this was unfair, not thorough enough, and the people here were used, she continued, warning those living near future projects to follow proceedings closely.

Balser says she asked countless questions about the finances of the projects, but was never given detailed answers by the company nor the state of Rhode Island.

Initially, Deepwater Wind told residents on Block Island that theyd save 40% on electricity bills with the switch to wind.

Now officials say the savings may be closer to 25%. That would save an average consumer about $30 per month.

Balser isnt even convinced of that, saying, I will not save any money, and neither will anyone else.

An unexpected price increase of the undersea cables bringing energy from the turbines to land accounts for some of the lost savings.

There were a number of areas where we encountered rocks, and so that made the complexity of installing the cables higher, the costs went up, explains Brian Gemmell of National Grid, the company in charge of that part of the project.

National Grid and Deepwater both say things like that offer valuable lessons learned as similar projects are built out in Massachusetts.

The other issue is the high price of power generated.

Right now, National Grid pays Deepwater Wind 24 cents per kilowatt hour generated.

That price goes up annually, landing at nearly 48 cents per kilowatt hour in 20 years.

The average price of electricity right now in New England is 16 cents per kilowatt hour.

But project officials say comparing the future price of offshore wind to the current average is misleading, since it too will increase with time, especially as coal and nuclear plants are decommissioned.

Plus, on Block Island specifically, using wind prevents customers from being subjected to the sometimes dramatic swings in diesel costs. Space will also be saved on the Block Island Ferry, now that diesel isnt being hauled to the island every few days. Block Island Power Company estimates that up to 1 million gallons of diesel was used annually, before switching to offshore wind power.

Meanwhile, Deepwater Wind continues to build out its plans for future offshore wind projects in Massachusetts. It hopes to know if projects are approved within the next year or so.

Published at 10:00 PM EDT on May 14, 2017 | Updated at 7:58 AM EDT on May 15, 2017

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Swirling Controversy: Celebration, Concern Over Offshore Wind ... - NECN