Category Archives: Offshore

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.

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Eversendai Bags Two Offshore Wind Contracts with Petrofac - Offshore Engineer

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

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.

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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)

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

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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.

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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

A UK Government select committee is to consider the potential of offshore wind and how policy can facilitate the UK making the best and most cost-effective use of the technology.

The Environmental Audit Committee (EAC) will hold the evidence session on Thursday 4 June at 09:30.

The UK has the largest market in the world for offshore wind. Over the past decade the offshore wind has grown rapidly due to reductions in the costs of constructing and operating wind power facilities.

Following the Governments Offshore Wind Sector Deal in March 2019, the EAC will consider the opportunities that will maximise the industrys potential, and the challenges it faces in delivering greater capacity.

The session will hear from experts from the sector and those involved with developing the Governments Offshore Wind Sector Deal.

The witnesses are Offshore Renewable Energy Catapult chief executive Andrew Jamieson, RenewableUK policy and regulation head Rebecca Williams and Orsted UK market development, consenting and external affairs head Benj Sykes, who is also co-chair of the Offshore Wind Industry Council.

The EAC's remit is to consider the extent to which the policies and programmes of government departments and non-departmental public bodies contribute to environmental protection and sustainable development.

The EAC audits their performance against sustainable development and environmental protection targets.

The session can be viewed at Parliament TV.

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UK Government to probe offshore wind potential - reNEWS

A consortium of eight Japanese companies will jointly bid to develop an offshore wind power project in Akita Prefecture for which a public tender is scheduled.

Sumitomo Corporation, INPEX Corporation, Japan Petroleum Exploration, JR-EAST Energy Development, Kato Construction, Narita Construction, TEPCO Renewable Power, and Venti Japan will jointly take on the project near the cities of Noshiro, Mitane, and Oga.

The Noshiro-Mitane-Oga offshore wind farm will be a fixed-bottom foundation project with a capacity of up to 480 MW. The wind farm is scheduled to be operational by 2026. The wind farm zone covers an area of 59 km2 with water depths of up to 30 metres.

In accordance with the Offshore Renewable Energy Act, the Japanese government is presently designating areas for which offshore wind power producers will be selected by public tender.

The area offshore Akita Prefecture offers a very suitable natural environment, with its favorable wind conditions and relatively shallow waters, so it appears likely to be designated a promotion area, the companies said.

Sumitomo Corporation has since 2018 been conducting environmental impact assessments, seabed surveys, wind condition studies, and other research in the area.

The consortium as the operating body will be making preparations for submitting a proposal for the proprietary use of the area.

The developers will also take into consideration the views expressed by a council comprising representatives from Noshiro, Mitane, and Oga as well as the national governments policies as it develops the project.

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Japanese Consortium to Bid for Wind Project Offshore Akita - Offshore WIND

The survival of Newfoundland and Labradors offshore oil and gas industry is essential to the survival of the province as a contributing member of Confederation.

Prime Minister Justin Trudeau attended the funeral service for my late father, John Crosbie in January, and I thank him for his courtesy and grace in doing so, and in visiting privately with the Crosbie family.

I know he is aware of the tumultuous struggles of this province to gain control of our offshore resources, culminating in principal beneficiary status for the province under the Atlantic Accord, and the aspiration captured by Premier Brian Peckford that Have not will be no more.

Since the discovery of the Hibernia oil field in 1979, Newfoundlanders and Labradorians have worked tirelessly to develop a world class industry. This industry now accounts for almost 30 per cent of provincial GDP, 13 per cent of labour compensation and 10 per cent of provincial employment.

While these numbers are significant, they do not account for the sense of prosperity and pride the oil industry has brought to the province. Through the hard work of Newfoundlanders and Labradorians in the oil industry, our province has been transformed and looking forward to a bright future under fiscally responsible good government.

Due to dual blows from foreign price wars and the economic devastation caused by the ongoing public-health crisis, the offshore oil industry is now at risk. Companies in the supply and service sector have left the province, workers have been laid off, exploration is being deferred, and major projects put on hold.

Every resident of this province feels the impact of this downturn, and a population loss looms comparable to that triggered by the 1992 cod moratorium.

Our long history with the ocean has taught us to be economic stewards, and the need for transition to sustainable energy is generally understood. As leader, I commit the PC Party when in government to the objective of meeting our share of Canadas 2030 greenhouse gas emissions target.

This week industry and provincial political officials publicly pleaded with the prime minister for industry support. The economic viability of the countrys most easterly province is in the balance.

On May 28, I wrote the prime minister not to plead, but to warn.

His failure to take action to deliver tax incentives to make investment in our offshore competitive with the investment regimes offered elsewhere in the world will risk a fiscal conflagration that may not be contained within the boundaries of one province. The prime ministers reputation in Canadian history for statesmanship rides on his response to the offshore petroleum industry in its moment of need.

The reputation and electoral future of the Silent Six Liberal MPs. led by Silent Seamus ORegan also rides on their ability to deliver in this moment of need. ORegan is the minister of Natural Resources responsible for the offshore and our federal cabinet representative. His failure to deliver competitive incentives would prove his irrelevancy.

On behalf of all Newfoundlanders and Labradorians I urge the prime minister and his Liberal government to deliver a world-competitive investment regime for our offshore industry.

History is watching.

Ches Crosbie,MHA Windsor LakeLeader of the PC Official Opposition

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LETTER: Urgent help needed for Newfoundland and Labradors offshore petroleum Industry - The Journal Pioneer