Offshore Crisis, the 2020.... version

And making a much-needed and long-term dent in Senegal’s unemployment problem, one would hope? (and one in particular…cough would hope that there is provision for lutte on board)

I feel your pain. The overnight closing down of the oil patch in New Zealand was beyond stupid and it couldn’t have happened at a worst time internationally. I also realise that you have spent a fair bit of coin getting all of your qualifications.

The offshore crisis cause companies to look for alternative use for their assets:

It is not over yet, but in the North Sea some rigs are getting back to work:

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Here is an old jack up rig put back to work in the decommissioning business:


There should be a market for this idea in the GoM. (??)

Russian oil giant Rosneft scoffed at BP’s predictions and has said it’s eager to scoop up any market share that European oil majors make available by shifting their investments from oil and gas to renewables.

Less and less people produce more of the food we eat in developed countries and how good it is for our general health is an argument I will leave for another day. Pretty much all of this food is produced with the assistance of the humble and not so humble tractor.
In trying to achieve a zero emissions tractor the visionaries have discovered that there is very little room under the hood of the tractor for anything other than the engine and gearbox.
John Deere came up with a battery version, it ran for 1 hour.:cry::frowning:
Then someone decided an extension lead was the way to go. Ohio here we come.
Maybe Mao Tse Tung was ahead of his time.

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500kW and some muppet said it has an endurance of 33 hours before charging.
If that were true on batteries, I would be on the phone to my broker.

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Now if we could just get some autonomous pea and lettuce pickers THAT would be an accomplishment. Easy to cultivate, plant and harvest grain such as corn, wheat, soybeans etc with a machine but the harvesting is a pain in the back when it comes to lettuce, tomatoes and other vegetables.

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3 posts were split to a new topic: U.S. Fleet Growth Under Trump Pence

do any corn farms run all machinery on ethanol?

Good synopsis here with some fun math on drillship ROI towards the end, basically explaining what most people now recognize…that new builds at original cost/today’s day rates/oil prices might not pay for themselves over the current average life of the rig (or at least 15years).

Also mentioned that if some company still has cash to buy one of the roughly 20 distressed new rigs languishing at build yards on the cheap they could actually make money, given a contract.

here is some more analysis on Transocean’s condition…very bleak indeed

Transocean has just provided its new fleet status report which is especially interesting to evaluate given current market conditions. Without further ado, let’s look at the changes that happened since the previous fleet status report was published:

  • Drillship Dhirubhai Deepwater KG1 got a 180-day option in India. The rig will work for Reliance until June 2021 at a dayrate of $127,000.
  • Drillship Discoverer Inspiration is idle since October 2020. The rig finished its previous contract with Talos in the U.S. Gulf of Mexico in August 2020.
  • Drillship Discoverer India is stacked since July 2020 when it finished its work for Burullus in Egypt.
  • Semi-sub Transocean Leader is stacked since July 2020 when it finished its contract with Premier Oil in the UK North Sea.
  • Drillship Deepwater Titan is now expected to begin its work for Chevron in the first half of 2020 and finish the contract in the first half of 2027. According to the previous estimate, the job was expected to begin in the fourth quarter of 2021.

Put simply, the company’s fleet status report looks grim. Transocean’s fleet of stacked and idle rigs continues to grow, and it will soon have to find work for drillship Deepwater Asgard, which is expected to conclude its work for Beacon Offshore in the U.S. Gulf of Mexico in November 2020.

Recently, Transocean announced cash tender offers which target bonds with near-term maturities in its continued effort to improve its debt position, but it’s hard to see how the company will avoid a comprehensive restructuring if the market situation does not improve materially.

At this point, Transocean has 9 (!) stacked modern drillships. Most of these rigs (if not all, depending on the length of the current crisis) will never make it back to the market. The fate of two idle drillships, Deepwater Orion and Discoverer Inspiration, is unclear at this point, but they are certainly at risk.

On top of the problems on the contract front, Transocean has to deal with creditors which try to threaten Transocean with default due to its recent debt exchange. Even if nothing bad happens in the court, it will be really hard for Transocean to stay afloat if it keeps putting rigs into stacked or idle state instead of finding work for them.

In my opinion, the recent stock price action is justified. The risks of bankruptcy are increasing day by day. The main problem is not a bunch of opportunistic creditors who are trying to threaten the company with a forced bankruptcy to get a better deal. The main problem is that Transocean’s active fleet is shrinking while the company’s capital structure is not designed to be supported by an ever-decreasing number of rigs.

While the company is actively trying to deal with near-term maturities to improve its runway and provide itself with a chance to wait for better times, its debt load is simply too big for the current market environment. Most likely, Transocean will have to join its peers and restructure its debt. Meanwhile, the company’s shares may have very good days from time to time as it often happens in such situations.

Basically everybody in the GoM right now.

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this is very sadly the whole dilemma in a nutshell…originally very expensive ships are worth very little without any work for them to do. Recently, I read that the Petrobras owned 2010 built drillship VITORIA 10000 sold at auction in October of last year for only $15M. You know the ship cost over $600M to have constructed 9 years ago and the market has only deteriorated far further in that year so it is quite possible that a similar drillship could be had today for under $10M…so what can be done with these ships other than deepwater drilling? It turns out that the VITORIA 10000 was sold to the Dutch conglomerate AllSeas Group to become a deepsea minerals mining vessel which makes me wonder why are not each and every drilling contractor climbing all over eachother to find partners to team up with to get out there and start harvesting the many billions of tons of seafloor nodules found in the Clarion-Clipperton Zone? The battery powered vehicles of the future need the rare and expensive minerals like cobalt these nodules contain and the ships to do this already are sitting idle and can be converted with relative ease and cost so why the EFF is this not happening? The owners of these ships have absolutely nothing to lose in pursuing this but so far all I hear are crickets chirping.

Of course if either Elon Musk or Jeff Bezos were a pal of mine…

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One problem is the lack of clear laws governing deep sea mining at the moment.
It is partly covered in UNCLOS, but not in details.
That the US has not ratified UNCLOS make it even more difficult to know what is possible to do and what is not.

PS> A drillship (SEDCO 445) was used to test the technology off Hawaii in 1978:

And in the Red Sea in 1979:
https://www.onepetro.org/conference-paper/OTC-3874-MS

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If it is not spelled out specifically to be illegal it will be assumed to be legal. Personally if someone can dig up minerals off the ocean floor I have no objection, assuming they do no damage. But how they could make money is a mystery to me. It costs a million USD a day to drill for oil but when you hit you have a many year return. Picking up stones seems to be a one time endeavor.

Until you find a new pile of stones…As to the current direction of this discussion, i.e., deep sea mining. Since it is in international waters the only thing currently applicable is UNCLOS. And since the US has not ratified it we are standing on the sidelines watching the show go on.

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but the show has yet to even begin and if the Senate can be brought around to ratifying the treaty with pressure from those who want to manufacture the newest generation vehicle batteries (read Tesla here) then we can jump into the lead or if the US doesn’t ratify it, then companies like Transocean go to the countries other than the US who have the concessions. Transocean is not bound by the US not being a party of UNCLOS from not being able to participate. The point I am trying to make is why aren’t these drilling contractor working their asses off to find alternative employment for their fleets?

There is quite a bit of coverage of this issue on the internet but this article here tells much about what obviously is going to be happening soon.

Now how US mariners get a part of this is another matter for debate but we’ll leave that aside at the moment.