Daily Archives: June 1, 2020

When Ohio recently approved construction of a wind farm in Lake Erie, the first ever freshwater offshore wind project in North America, the developers were shocked.

The approval by the Ohio Power Siting Boardincluded conditions that the developer,Lake Erie Energy Development Corporation (LEEDCo), says will essentially kill the project. The turbines must be shut down at night for eight months of the year, from March to October, to protect birds and bats.

LEEDCo, apublic-private, non-profit partnership,has pushed for years to build an offshore wind project, called Icebreaker Wind, in Lake Erie, about eight miles from downtown Cleveland.

The project proposesto build six wind turbines, producing more than 20 megawatts of energy, enough to power about 7,000 homes. According to the company, it would create 500 jobs, and more than $250 million in local economic development.

Icebreaker is billed as a demonstration project, and is thus named because it would show whether wind turbines can withstand the force of ice sheets that form on the Great Lakes in winter.LEEDCo hopes to use this project, in the works since 2012, as a jumping off point to build a larger offshore wind energy industry in the Great Lakes.

There are more than 100 offshore wind farms in Europe, but theres only one in the U.S., off the coast of Rhode Island. Among renewable energy sources, wind produced the most energy in 2019, and that came almost entirely from land-based wind turbines. But offshore wind energy is expected to ramp up within the next decade.

The Ohio Power Siting Board (OPSB), which certifies significant new utility projects, like electric generating plants, gas pipelines, and wind farms, recently announced that it approved the Icebreaker project, under the condition thatLEEDCo turn off or feather the turbines at night from March 1 to November 1, and conduct radar studies of birds and bats. Millions of birds migrate twice a year at night over Lake Erie.

Based on the results, LEEDco must come up with a plan to mitigate the impacts. Once that is done, the company could seek approval to run the turbines at night.

But LEEDCo President Dave Karpinski doesnt see this as an approval. He calls the state decision a project killer, a poison pill, and says it makes the offshore wind project unable to be financed.

According to Karpinski, LEEDCo has already provided huge amounts of data and analysis of this issue. It has gotten all other required approvals from state and federal authorities to move forward, including an Environmental Assessment by the US Department of Energy, under the National Environmental Policy Act, or NEPA.

Their environmental assessment found that there were no significant impacts, Karpinski said. The Army Corps has issued its permits for doing work in the water. The Ohio EPA has issued its approval permit.

Also, LEEDCo already negotiated this specific issue with technical staff of the Ohio Power Siting Board. According to Energy News Network, the OPSB staff suggested nightly shutdowns to protect bats and birds in 2018, even though LEEDCo had already reached agreement with environmental groups. LEEDCo negotiated with OPSB staff and the Ohio Department of Natural Resources for months. They reached a compromise last May that dropped the requirement.

So, Karpinski says, he was shocked when the board included it in the final vote.

If you can do all that work and reach these agreementsall these objective people that are paid to do this, and arent biased by interests on either side made that decision, and it was reversed and thats a problem, he said.

The agency defends its authority to make this decision. Matt Butler, spokesperson representing the OPSB said in an email, The Board is not bound by settlement agreements and may accept, reject, or modify settlement agreements based on the case record.

The Black Swamp Bird Observatory, in northern Ohio, and the Washington, D.C.-based American Bird Conservancy (ABC), filed a federal lawsuit in December against the Department of Energy and other agencies. They want a more thorough environmental assessment, and are challenging the government funding for Icebreaker Wind, which has been more than $50 million.

ABC is pleased that Ohio regulators put nighttime limitations on the turbines in their decision. We thought that was appropriate, said Steve Holmer, the groups vice president of policy.There still has not been adequate monitoring or proven mitigation and so it makes sense to take a cautionary approach here.

This has been already identified as a globally significant bird area, he continued. The issue is whether were going to fully, adequately consider wildlife when we make these decisions and in our view, they simply havent. We think that this is just not an appropriate location for wind development.

Other environmental groups, including Sierra Club and the Ohio Environmental Council, support Icebreaker Wind, saying that the developer has shown it will monitor and protect birds and bats, while providing offshore wind power that can offset carbon emissions from fossil fuels that contribute to climate change, and are also detrimental to birds.

Under the OPSB board decision, the offshore wind project is economically un-workable, according to Karpinski. Hes looking into what happened. He wants to know why the Ohio board did not follow the agreement signed by its own staff. Karpinski also points out that its been reported that Murray Energy, a coal company, paid nearly $1 million to a law firm that assisted two residents who opposed the project.

LEEDCo has 30 days to apply to the board for a rehearing, and can then appeal the decision to the Ohio Supreme Court if it chooses.

Read more here:

Great Lakes offshore wind approval a 'poison pill' - alleghenyfront.org

Orsted has recruited two new executives to expand its US offshore wind team.

David Hardy has been appointed president and chief operating officer for Orsted North America Offshore, while Pamela Farrell Venzke joins as the units new president for external affairs.

Hardy, who joins Orsted from Senvion, will be based out of the Danish developers Boston and Providence joint headquarters.

Venzke, who joins from GE Power, will work out of Washington, DC.

Orsted North America Offshore chief executive Thomas Brostrom said: As we continue develop and expand our project portfolio in the US, Im thrilled to be welcoming such strong new voices to our leadership team.

David and Pamela bring unparalleled experience and expertise to our efforts as Orsted continues to lead the way in the North American offshore wind industry.

Hardy will oversee Orsteds end-to-end asset portfolio from development to operation.

At Senvion he served as executive director and chief sales officer overseeing all the regional activities of the company, including sales, construction, service and support.

Hardy said: The potential for offshore wind to transform our countrys energy landscape is real, and Orsteds experience, along with its push to develop new markets to grow this clean energy industry, is urgently needed.

Venzke will oversee teams managing government relations, public affairs, communications, sustainability and regulatory approvals.

At GE Power her role was managing director of global government affairs and policy and part of the units executive leadership team. She also served on the chairmans corporate law and policy council.

Its exciting to work in an emerging market that happens to be your home country, Venzke said.

The US is in a position to be a world leader in offshore wind and Orsted is the company that can get us there.

With more than 6.8GW in operation and another 3.1GW in construction, Orsted has the experience and the track record to establish offshore wind as a major power source and economic driver for the US at a time when we need that more than ever and I am so happy to be a part of this journey, she added.

Read more from the original source:

Orsted bolsters US offshore wind team - reNEWS

At Scotlands easternmost headland, the old fishing port of Peterhead juts out into the North Sea. On a clear day, says Alastair Reid, an economic development official with the Aberdeenshire Council, from the harbor you can just make out the turbines of the Hywind park.

In windswept northern Scotland, where abundant wind arrays both on land and off the coast vie for limited space, the distant location of the five towering 574-foot-tall turbines, 15 miles offshore, is just one novelty of this renewable energy project. Indeed, Hywind Scotland, which generates enough electricity for more than 20,000 homes, is the first wind energy array that floats on the seas surface rather than being dug into the ocean bed. Proponents say the technology heralds a new generation of green energy.

Whats groundbreaking about the Hywind project, located in more than 300 feet of water, is that the giant masts and turbines sit in buoyant concrete-and-steel keels that enable them to stand upright on the water, much like a fishing bobber. The turbines nearly 10,000-ton cylindrical bases are held in place with three taut mooring cables attached to anchors, which lie on the seafloor.

In contrast to ordinary offshore wind turbines, with long towers sunk into the seabed and bolted into place in shallow seas 60 to 160 feet deep, the advantage of floating turbines is that they can access large swaths of outlying ocean waters, up to half a mile deep, where the worlds strongest and most consistent winds blow. In Europe, where the density of onshore and near-shore wind turbines in places like Germany, the United Kingdom, and Norway has spurred increasing opposition to new arrays, the floating turbines can be installed over the horizon, out of sight of coastal residents.

Floating wind power has enormous potential to be a core technology for reaching the climate goals in Europe and around the world, says Frank Adam, an expert on wind energy technology at the University of Rostock in Germany.

The ocean space beyond the reach of conventional offshore turbines makes up 80 percent of the worlds maritime waters, opening the way for floating arrays, Adam says. In the past few years this technology has made great strides, and Hywind shows that it can work as a whole park, says Adam. Now the farms have to grow bigger to show governments and investors that theyre feasible on a really large scale.

Some renewable energy experts remain skeptical that the high costs of floating offshore wind turbines currently the electricity they generate is often almost twice as expensive as near-shore wind turbines and three times that of land-based wind turbines will come down far enough to rival other clean-energy technologies.

It will always be cheaper to build turbines on land, and that is where the [emissions-reduction] targets are going to have to be reached, says R. Andreas Kraemer, founder and director emeritus of the Ecologic Institute, a Berlin-based think tank. Even though the floating parks may be cheaper in some cases than fixed offshore wind power plants, and deployable over a larger sea area, it is still maritime engineering and that makes it expensive to build, deploy, and maintain. Lifespans of the stations are short because of the corrosive nature of the marine environment.

Floating wind turbines use chains to anchor to the sea floor up to a half a mile deep. Joshua Bauer/NREL

But advocates of floating wind arrays note that the costs of onshore and near-shore wind energy have been steadily falling as the efficiency of these technologies has been rising; the same trends, they contend, are likely to lower the costs of floating offshore wind. The Hywind Scotland array 75 percent owned by the Norwegian firm Equinor, formerly Statoil has been in operation for nearly three years and remained afloat and generating power during Hurricane Ophelia in 2017 and throughout other harsh winter storms with 100 mile-an-hour winds and 27-foot waves.

Other floating wind projects, some with turbines larger than Hywind, are now being built in Europe and Japan. In Portugal, the WindFloat Atlantic project, now under construction, is expected to produce enough power for 60,000 homes when it is completed later this year. France has floating wind power written into its clean energy plans and says it aims to be a world leader in deploying the technology. It has dedicated sites and price supports for wind farms off of Brittany and the Mediterranean coast. Scotland, which aspires to cover all of its electricity needs with renewables this year, has new floating parks in the works, including one just south of Hywind Scotland.

How renewable energy could emerge on top after the coronavirus pandemic. Read more.

Walt Musial, an offshore wind energy expert at the National Renewable Energy Laboratory, a research institute funded by the U.S. government, says that in the United States the coastal waters of both coasts are often too deep for conventional offshore wind turbines; nearly 60 percent of suitable offshore wind locations, he notes, exist in places at depths greater than 200 feet. That creates yet another opportunity for floating wind energy technologies.

Po Wen Cheng, head of an international research project on floating wind energy at the University of Stuttgart, says that floating turbines could produce more energy than the largest onshore or offshore technologies. Not only are winds in deeper waters more powerful than those closer to shore, he says, but the physics of the flexible, suspended rigs enables them to carry larger turbines. The bigger the turbine, the more energy they can produce in the right conditions, he says. Cheng argues that floating turbines could be even taller than todays largest offshore rigs, perhaps with 400-foot blades and towers stretching nearly 1,000 feet into the air as tall as the Eiffel Tower. Turbines of such dimensions could generate three times the electricity of todays most advanced onshore turbines, says Cheng.

Experts say that while some of the floating turbines finer mechanics are still being tweaked, the technology is sound. The oil and gas industry has used similar marine know-how for decades. (Hywind Scotlands chief owner, Equinor, is Norways largest oil and gas company.) And the masts and rotors are identical to those of conventional offshore wind turbines. Floating turbines can adopt a lot of knowledge and experience of the wind power development of the past 10 years, which gives them a huge jump, says Adam. Like conventional offshore wind arrays, the floating turbines transmit electricity to coastal grid connections through heavy-duty underwater cables.

In Europes ambitious plans to be carbon-neutral by 2050, wind energy of all types figures prominently. Although onshore wind parks are the most cost-effective solution, they have been met with stiff opposition from activists, who object to their marring the landscape, the proximity to their homes, and the impact on nature, particularly birds. In some countries, such as Germany and Norway, citizen opposition has nearly ground onshore wind to a halt.

Offshore wind farms in the North Sea, Baltic Sea, and elsewhere have substantially increased clean-energy production in Europe and driven down the price to a level competitive with fossil fuels. But Europes current offshore production is roughly 5 to 10 percent of the wind power supply that the International Energy Agency (IEA) and the European Union says Europe should reach by 2050 to meet its goals under the Paris Agreement. The problem is that a massive increase in near-shore wind arrays simply isnt feasible, in part because of growing opposition from fishing fleets, conservation groups, and coastal residents.

This is where floating parks enter the equation, says Jonathan Cole, the managing director of offshore wind energy at Iberdrola, one of the worlds leading producers of wind power. Green energy is going to be needed in all sectors of the economy, says Cole. Fixed-bottom offshore wind will be expanded far beyond what it is today, but it will run out of space, too, like onshore has in some places.

A floating turbine being pulled out to sea off the coast of Portugal for the WindFloat Atlantic project, now under construction. DOCKgo/WindFloat Atlantic

Ib Krag Petersen, a wildlife ecologist at Aarhus University in Denmark, says birds such as eagles, ducks, griffins, storks, and gannets can collide with the mammoth blades of offshore rigs. But deep-sea wind arrays, he says, where the density of the turbines and the communities of birds are more thinly distributed, have less of an impact on seabirds than near-shore wind arrays.

The Hywind project enjoys broad support in Aberdeenshire, Reid, the local economic development administrator, says. Among other things, Equinor has worked with the prominent fishing sector that docks at Peterhead so as not to interfere with its operations.

Investors and renewable energy companies say that the most formidable hurdle to full-scale rollout of floating wind arrays is recognition from governments, utilities, and financiers that the technology is viable and that costs will inevitably fall. We need commitments from governments, the way France, Scotland, and Japan have done, to help get bigger floating parks off the ground, says Bruno Geschier, chief sales and marketing officer of Ideol, a multinational offshore wind developer.

After an uncertain start, U.S. offshore wind is powering up. Read more.

Adam of Rostock University says, Its easy to produce one or half-dozen floating turbines, but 10 or 20 or 100, thats another story. This requires supply chains, shipyards, and ports that can handle such enormous structures, and factories for serial fabrication, he says.

Despite these challenges, the promise of harnessing so much of the open seas for renewable energy generation remains an enticing proposition. As the IEA has noted, in theory, offshore wind power alone could eventually meet the entire electricity needs of Europe, the U.S., and Japan many times over.

See the article here:

Will Floating Turbines Usher in a New Wave of Offshore Wind? - Yale Environment 360

Offshore harvesters are tackling the age-old problem of ghost fishing in an effort to create healthier, cleaner oceans.

Andrew Titus is taking part in the pilot project. He is the former captain of Mersey Seafoods northern shrimp vessel the Mersey Phoenix.

Lost or abandoned fishing gear, often referred to as ghost gear, pollutes oceans and contributes to the mortality of fish stocks. If not retrieved, ghost fishing gear can continue the destructive cycle of entangling and killing marine species for many years.

The United Nations has estimated that 640,000 tons of abandoned, lost or discarded fishing gear enters the ocean annually.

The DFO removes ghost gear from the Gulf of St. Lawrence during Operation Ghost in 2019. Photo from DFO website.

Prior regulations didnt allow harvesters and others to keep the ghost gear and bring it to land. Titus says DFO has now allowed that.

He says thats the biggest change and theyve convinced DFO that will contribute to a healthier and cleaner ocean.

Observers will record the position of the ghost gear, collect them from the ocean and store them on their ships.

He compares ghost gear to trash in the woods.

Titus says its the breakdown of whats essentially garbage.

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Pilot Project Allows Offshore Harvesters to Remove 'Ghost Gear' from Oceans - VOCM

Eversendai Offshore has been awarded construction contracts by Petrofac for two offshore wind projects in Europe, Bursa Malaysia-listed Eversendai said Monday.

The first contract is for the fabrication and construction of an offshore wind substation platform topside, jacket & piles for an offshore wind farm in the United Kingdom.

Another project is to build jacket & piles for the Hollandse Kust Zuid (HKZ) Beta offshore wind substation platform for end-client TenneT in the Netherlands.

The total value of the contracts is RM186 million (USD 43 million).

These projects will be executed in Eversendais 200,000 sq.m. waterfront fabrication yard in RAK Maritime City, Ras Al Khaimah in the United Arab Emirates.

The scope of work for the UK offshore wind farm substation project includes engineering, fabrication, construction, sea- fastening, and loadout of the offshore substation platform topside, jacket, and piles including HVAC, architectural and mechanical completion as well as pre-commissioning of the substation platform topside.

"This offshore wind substation will be the highest capacity in the world, and it is expected to generate clean energy that will be enough to power approximately one million homes in that region," Eversendai said.

The scope of work for Hollandse Kust Zuid (HKZ) Beta for the Dutch North Sea project includes engineering, fabrication, construction, sea-fastening, and loadout of the jacket & piles.

Narish Nathan, Chief Executive Officer at Eversendai Offshore, said: This is a significant achievement that marks our continued expansion in the offshore wind renewable energy sector; a market we recognize is vital for the worlds future clean energy needs."

"We have been involved in the Hollandse Kust Zuid (HKZ) Alpha project and we are delighted to continue our association with Petrofac building a stronger relationship for the future."

"This diversification into the offshore wind renewable energy sector continues to promote our diversification efforts of growing our business into industries that leverages on our fabrication facilities and core expertise in engineering, fabrication and construction, he added.

Continue reading here:

Eversendai Bags Two Offshore Wind Contracts with Petrofac - Offshore Engineer

Norwegian government has earmarked NOK 25 million (approx. EUR 1.3 million) for a project in the offshore wind industry and establishment of a research center for renewable energy.

NOK 15 million (approx. EUR 1.4 million) have been proposed for the new renewable energy research center, which will focus primarily on the challenges in the offshore wind sector.

The new research center will bring together the best in industry, institutes and academia to solve various challenges related to the development of offshore wind power in Norway, said Petroleum and Energy Minister Tina Bru.

The additional NOK 10 million (around EUR 926,000), allocated by the Ministry of Petroleum and Energy, will support the development of supply chains and delivery models for offshore wind.

This will help launch a larger project to strengthen industrial cooperation and develop supply chains and delivery models adapted to a rapidly growing market, Minister Bru said.

The project is led by Norsk Industri.The work will, among other things, draw on knowledge and well-functioning collaborative models developed over many decades of oil and gas operations, according to a press release from the Norwegian government.

The governments funding in the offshore wind sector was announced today (29 May) as part of proposed economic measures aimed at strengthening Norwegian companies and jobs, and contributing to green restructuring.

Read the rest here:

Norway Gives Boost to Offshore Wind - Offshore WIND

WINNIPEG, Manitoba, May 30 (Reuters) - A fire on the idled Terra Nova oil facility that Suncor Energy operates off the coast of Newfoundland & Labrador has been extinguished, the energy regulator for the province said on Saturday, even as the vessel faced an uncertain future.

No one was hurt in the fire, the Canada-Newfoundland and Labrador Offshore Petroleum Board said in a statement. There was no oil or gas held onboard the vessel as it was not producing, the regulator said.

Further details were not available and Suncor could not be immediately reached.

The regulator ordered Suncor in December to shut down Terra Nova, operating in the Atlantic Ocean some 350 kilometres (217 miles) east of St. Johns, after finding that the companys fire water pump system was non-compliant.

Terra Nova has operated since 2002 and can store 960,000 barrels of oil, according to Suncor, which owns nearly 38% of the vessel. Other companies, including Husky Energy, own smaller stakes.

Suncor had scheduled work on the vessel in Spain to extend its life by a decade, but said this month that it had suspended those plans due to the pandemics spread in that country. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Sandra Maler)

See more here:

Fire extinguished on Suncor offshore oil vessel that faces uncertain future - Reuters

To print this article, all you need is to be registered or login on Mondaq.com.

On 11 June 2019, the President of the Republic issued Decree No724 updating the list of jurisdictions and territories withpreferential taxation (see our legal update of July 2017).

The following are the original and updated lists of suchjurisdictions (green colour bold typeface indicates removal whilered bold typeface indicates inclusion, jurisdictions in regulartypeface indicate no updates):

The updates may follow the EU list of tax havens: https://ec.europa.eu/taxation_customs/sites/taxation/files/eu_list_update_18_02_2020_en.pdf.

Earlier, under Law No 1356-VQD of 30 November 2018 effective2019, payments (i) of residents to branches and representativeoffices in any countries and (ii) to bank accounts inlow-tax jurisdictions and territories (in addition to payments topersons of such jurisdictions) have been designated as incomesourced from Azerbaijan.

The concept of a "sham transaction" has been known inAzerbaijani law for quite some time. Under the Civil Code, a shamtransaction is a transaction having the purpose of concealinganother transaction. The sham transaction is void.

For the purposes of taxation, the concept of a "shamtransaction" is relatively new. On 29 November 2019, newamendments were introduced to the Azerbaijani tax law, which becameeffective from 1 January 2020. Most amendments, essentially, servedthe purpose of strengthening the enforcement mechanisms against taxevasion. In this respect, two new definitions that were presented,namely, the sham transactions and a risky taxpayer caught specialattention.

The Tax Code defines a sham transaction as a transaction reveledin the course of a tax inspection having the purpose of hidinganother transaction and gaining profit without an actual supply ofgoods, provision of services or performance of works. In otherwords, sham transactions are the ones where the allegedtransactions never take place.

By way of example, company A concludes an agreement with companyB for the sale of office equipment to company B and company Bagrees to pay company A. Although company B pays company A theagreed upon amount, the sale of office equipment never occurs.

The introduction of the concept of "sham transactions"in the Tax Code also triggered some exceptions from the generallyaccepted rules. For instance, under the previous edition ofSub-Section 78.4 of the Tax Code, the discharge of tax obligationscould not be transferred to another person. Now, however, suchtransfer is possible in sham transactions, i.e., adischarge of a tax obligation in sham transactions can betransferred to the beneficiary (i.e., individualshareholder of company A). Only individuals can be beneficiariesfor the purposes of sham transactions. Beneficiary can be theactual recipient of income or the actual owner of a legal entityreceiving the income or an individual supervising the taxpayer.

For tax-deductibility purposes, the documents obtained during asham transactions are not taken into account by the tax authority,which relies upon the market value of goods (services, works) oralternative methods of calculating tax-deductible costs.

The value added tax paid during a sham transaction cannot beoffset.

Another concept that was introduced to the Tax Code is a"risky taxpayer". A risky taxpayer is a person conductingsham and/or risky transactions.

The Cabinet of Ministers will establish the criteria fordetermining risky taxpayers. The Ministry of Taxes, in turn, basedon those criteria, will resolve on entering the taxpayer in, orexcluding, from the list of risky taxpayers.

Information about risky taxpayers will be open to public andavailable on the website of the Ministry of Taxes.

The following rules apply to risky taxpayers, among others:

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

POPULAR ARTICLES ON: Tax from Azerbaijan

Withers LLP

Individuals may consider giving away valuable assets to family members for various personal reasons, but one of the most logical reasons (at least, for UK domiciled and deemed domiciled individuals)

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List Of Offshore "Tax Havens" And Payments To Them Updated - Tax - Azerbaijan - Mondaq News Alerts

Shell's Perdido platform in the Gulf of Mexico.

On any given day over the last four years, there have been around 20 oil drilling rigs somewhere in the Gulf of Mexico, tearing through submarine rock in search of oil.

Last week, there were just 12, according to data from oil services firm Baker Hughes BHI . With just one exception, that was the lowest weekly tally of rigs in the Gulf since 2000.

The worlds offshore oil industry, responsible for 30% of all the worlds oil production, faces a reckoning. With oil prices still well below levels from just months ago and key questions about future levels of oil demand unanswered as the COVID-19 pandemic reshapes the global economy, companies are reigning in capital spending and reassessing long-term goals. That could mean that a growing share of the worlds oil production is pumped from cheaper onshore alternatives, rather than pricey offshore ones, at least in coming years.

In the Gulf of Mexico, home to the vast majority of US offshore oil production, pullbacks, pauses and cancellations have been the word of the day. Royal Dutch Shell has delayed plans to finalize development of a huge new oil field called Whale until 2021. Shallow water producer Cantium LLC halted all production in late April, unable to recoup operating costs. Kosmos Energy KOS , a company that is also active in Africa, said recently it would shut in some of its production during the second quarter.On top of it all is the steep decline in number of oil rigs.

Things are not looking good for offshore drillers, said Jon Marsh Duesund, a partner at energy research firm Rystad Energy.

Many oil firms that operate offshore had not yet recovered from the last price downturn when this one hit. In 2014-15, oil prices collapsed from over $100 to below $40, sending seismic shocks through the industry. A lot of these companies werent out of the woods from the previous downturn yet, said Duesund.

Coming into 2020, drillers and producers alike were pinning their hopes on a cache of new projects that were given the green light in 2018 and 2019. And indeed giant new fields such as those in development by ExxonMobil XOM in South Americas Guyana are set to yield a gusher of new offshore output over the next couple years.

The real impact of the current downturn will show up not in the number of projects completed this year and next, but in the number of new projects that are greenlighted over that same period.

Were probably not going to see a lot of project sanctioning in 2020, with only modest levels of comeback in 2021, he said. What we saw in the previous downturn in 2015 was that not many projects were sanctioned [that year], and there was more sanctioning only in 2017-18."

"Generally, companies do just put things on pause for a little while.

Rystad said it expects even fewer projects to be greenlighted this year than at the nadir of the last price collapse in 2016. We are seeing alarming numbers from April as the market faces postponed drilling programs, suspended rigs and cancelled contracts, it warned last month.

Peter Maniloff, a professor of energy and environmental policy at the Colorado School of Mines, said offshore oil's high costs and long project timelines pose a barrier.

"That means that not only does the price need to be high to make them pay off, it needs to be high for years," he wrote in an email."I dont expect much new offshore drilling in the near term."

Debt problems return

As if offshore oil companies didnt have enough problems, they are also staring down a tidal wave of debt repayments.

After the price collapse of 2014-15, many oil firms refinanced existing debt in hopes of paying it back once prices recovered. But prices never completed their expected recoveries. The approaching wall of debt repayments will be most painful for Americas prolific but fragile shale oil sector, nourished by an ever-growing pile of loans and bonds. But many independent companies that operate in the shallow waters off Louisiana and Texas will also be hit hard. Analysts predict that companies specializing in contracting out oil drilling rigs will be hit hardest, with firms like Noble Corporation NE and London-based Valaris at risk of bankruptcy.

Offshore drillers and offshore vessel providers will generally be unable to pay their total outstanding debt of 2020 based on their cash flow from operating activities, unless they are able to make sufficient capital expenditure cuts, Rystad said in April. Otherwise, they will have to turn to capital markets for refinancing.

Surprising many industry observers, crude prices have rebounded strongly since briefly plunging below $0 per barrel for the first time ever in late April. Barrels of US benchmark crude WTI are now valued above $30 for the first time since early March.

But as offshore companies seek to revive drilling and sanctioning of new projects, they will face stiff competition: their onshore rivals in the shale basins of Texas, New Mexico and other US states are gunning for investor dollars, too. And in a post-pandemic world, these shale fracking firms may just have an edge. Shale plays are cheaper, faster, and face fewer unknowns than multi-billion dollar offshore ventures. That could make them a safer bet for firms and investors unsure of what demand for oil will look like one, two and ten years from now.

"In addition to the price collapse, deepwater Gulf of Mexico prospects are further disadvantaged by much greater risks, said James Griffin, a professor of economics at Texas A&M University. Much more is known about the geology of onshore prospects such as in the Permian and Delaware Basins."

These trends could end up accelerating a transition towards onshore oil that has been long in the making. According to a November 2019 report by Sanford C. Bernstein & Co, the bounty of new offshore projects set to come online this year will briefly lift global offshore crude production. After that, though, new offshore production growth will be minimal, the report concluded. Even before COVID-19, prices were simply too low.

Louisiana hurting

In Louisiana, home to all 12 remaining American oil drilling rigs, the industrys pause on offshore activity is personal. Drilling crews wait at home and deckhands have less work.

Its devastating, said Gifford Briggs, president of the Louisiana Oil and Gas Association, which said early this month that 51% of member firms who responded to a survey or more than 100 businesses considered bankruptcy likely. Major companies will get through, because their revenue doesnt solely depend on production[But] independent producers will be hit hard.

Still, many insist that, while they have heard about the financial and unemployment problems, they have yet to see it for themselves. That could be because most of the turbulence inside Americas offshore sector has occurred in the shallow water sections less than 200 meters deep. It is the deepwater portions of the Gulf of Mexico that actually produce most of the regions crude. Deepwater drilling and production is dominated by supermajors like Shell, BP and Chevron and they are not facing the kind of existential crisis that threatens to drag smaller companies under.

Our clients are watching the market closely in mid- to long-term, but in the interim weve seen very little change said Matthew Rigdon, executive vice president of Jackson Offshore Operators, which transports fuel, chemicals and other supplies to offshore rigs operated mainly by the majors.

White House reviewing a plan for industry relief

In March, smaller and independent companies most vulnerable to bankruptcy began campaigning for financial relief. But the Trump administration was opposed to the idea of offering relief to the sector, and the industry instead focused on a narrower form of relief which would be aimed primarily at the offshore oil sector. Companies have floated a range of ideas, from a temporary suspension of royalty payments typically 18.75% of the value of all offshore production from federal waters to a three-year extension of primary lease terms on oil wells.

Whether industry relief is on the way remains uncertain. But commodities specialist publication Argus Media, citing industry officials, reported late last week that the White House is reviewing a plan to allow oil and gas firms to defer royalty payments for three months. The policy was sent to the White House from the US Office of Natural Resources Revenue (ONRR), Argus reported, although it wasn't clear whether the rule would target the offshore specifically or provide blanket relief.

A deferral of payments, rather than a suspension, might shield smaller businesses without extensive reserves from a cash crunch.

It isn't clear when the White House will finish reviewing the rule, which was submitted to the Office of Information and Regulatory Affairs on May 20, federal records show.

Excerpt from:

On Pause - Offshore Oil Industry Faces Biggest Setback In Years - Forbes

DEME Offshore has joined the team behind the PosHYdon project that aims to integrate offshore wind, offshore gas, and offshore hydrogen in the Dutch part of the North Sea.

Within the project, DEME Offshore will be in charge of providing the hydrogen unit for installation on the Q13a platform, operated by Neptune Energy. There, the three energy systems put together will result in the production of hydrogen from seawater.

The company is involved in the conceptual design of a 100 MW offshore hydrogen gas production plant, and a task leader in the evaluation of the business case in line with the 10 MW concept for the platform that will have a 100 MW capacity.

Furthermore, DEME will also be involved in the transport and installation of the onshore hydrogen unit to the Q13a platform.

The expertise that DEME has built worldwide helps us all to scale up after PosHYdon from 1 MW to 100 MW a crucial step for further developing offshore wind energy and enabling conversion to hydrogen in the North Sea, said Lex de Groot, Managing Director of Neptune Energy in the Netherlands.

This will be important for windfarms far away from the coast which will be built after 2030, particularly given electricity prices are so low, which could slow down the further development of offshore windfarms. This development is essential to support achieving future climate targets.

ThePosHYdon pilotis an initiative of Nexstep, the Dutch association for decommissioning and reuse, and TNO, the Dutch organisation for applied scientific research, in collaboration with the industry.

Companies involved in the project, along with their newest member DEME, include Neptune Energy, Gasunie, Eneco, TAQA, EBN B.V., NAM, NOGAT B.V., and Noordgastransport B.V.

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DEME Offshore Gets On Board PosHYdon Project - Offshore WIND