One of the few pop videos to feature a vessel is the 1980s classic Karma Chameleon by Culture Club, set in 1870 as lead singer Boy George boards a Mississippi paddle steamer amid a crowd of men in stovepipe hats and Victorian breeches, ladies in lace finery and showgirls in feather boas, to the accompaniment of a harmonica.
Despite the disconcerting SOLAS violations when a cheating cardsharp is thrown overboard without a life-saving appliance, the catchy chorus runs as follows:
“Loving would be easy if your colours were like my dream.
Red, gold and green, red, gold and green...”
Which begs the question, what are the colours of the offshore dream at the moment, an industry where, in the words of the song, “every day is like survival (survival)”?
With the next round of quarterly reports still not yet due for some weeks – Transocean is scheduled to report its latest results on November 3, and Tidewater on November 6 – and with no ICBC auctions of the laid-up vessels the bank owns in the Bourbon fleet last week, we will have to dream harder.
We have criticised Upstream in the past for its shameful puff piece regarding a certain Chinese shipowner at the centre of various lawsuits. This week, the industry’s newspaper of record was back with another puff piece about a Chinese company, although to read the piece, you wouldn’t actually know the company was Chinese state-owned.
We refer of course to “Singapore-headquartered Bluewhale Offshore,” which, “has a fleet of five state-of-the-art semi-submersible drilling rigs,” as per the article by Russell Searancke last week.
None of these things is untrue, but as with the Simon Liang piece, a lot was left unsaid that should have been said out loud. The company may be Singapore-headquartered, this is correct, but it is owned by the Chinese State as part of the CIMC Group.
All of its five floating rigs were built at the company’s CIMC Raffles Shipyard in China (indeed, two are still there waiting to be commissioned and brought into service, being Beacon Pacific and North Dragon), and despite efforts to charter the two flagship Bluewhale I and Bluewhale II DP3 deepwater semi-subs internationally, they have only worked in China, mainly on methane hydrate projects in the South China Sea, since their delivery in 2017.
Mr Searancke interviewed Bluewhale’s Marketing Director, who extolled the capabilities of the company’s fleet, highlighting that the rig, “Deepsea Yantai, originally named Beacon Atlantic… has worked reliably and to high praise for about six years offshore Norway.”
This is true, but the unit is completely managed by Odfjell Drilling, which operates the semi-sub offshore Norway, and when the rig was delivered in 2019, CIMC announced Odfjell had right of first refusal to purchase the unit when the Norwegian company’s undisclosed “exclusive marketing period” expired.
Odfjell still manages the unit and Bluewhale itself has nothing to do with the crewing or technical management.
Upstream was able to reveal that, “Bluewhale I is currently preparing to start a new contract of about one year duration with Posco International,” without saying where.
However, a quick glance at Posco’s international operations suggests that this is likely to be in the pariah state of Myanmar, currently subject to strict western sanctions on account of the military coup in February 2021, which has led the country sliding into a brutal civil war, which has claimed over 6,000 civilian deaths.
Posco operates the Shwe gas field in the Andaman Sea, which produces 36 per cent of Myanmar’s gas output, and all the gas from the field is piped by land to… China.
In 2024 Posco announced a US$900 million investment in phase four of the field development, with China Offshore Oil Engineering Company winning the offshore construction and pipelay contract… helped by the fact that no western competitor was able to bid due to the sanctions.
Similarly, all the publicly listed deepwater rig operators have withdrawn from the country and Woodside has suspended its exploration in Myanmar. Thailand’s state energy company PTTEP continues to produce gas there offshore for export to Thailand.
Winning a contract in a country where there is no international competition doesn’t mark a great breakthrough for Bluewhale.
Bluewater's Marketing Director told Upstream that the company’s other two units, the harsh environment semi subs Beacon Pacific and North Dragon, “are being marketed for harsh-environment operations in Australia, Canada and Norway, including the Barents Sea, anywhere that is cold and rugged.”
This is true, but it seems highly unlikely that any client in those markets would charter the rigs that have sat unfinished for many years in Dalian, unless they were managed by an experienced international contractor like Odfjell or Vantage Drilling or Ventura.
Unfortunately, the drilling industry relies on track record and experience, and in the eyes of clients in Australia, Canada and Norway, Bluewhale has very little. That is even before the obvious political challenges of entrusting a drilling programme in a harsh and very sensitive environmental area like the Grand Banks of Canada or the Barents Sea to a Chinese state-run contractor with no local presence or operating record.
Blue may be one of the colours of my dream, but I am sensing Bluewhale has a struggle to break out of its niche without a strong manager in place to run its rigs.
If the Upstream piece on Bluewhale was guilty of some omissions, it served its purpose. Anyone reading the piece was reminded that there are still four very available, very high-specification semi-subs in China that Bluewhale is happy to market internationally for drilling campaigns globally.
The second marketing scoop of the week was by Erik Prince at African Energy Week in Cape Town, where he took to the stage in front of an audience of oil and gas industry executives to tout his private security contractor credentials and the need for governments to employ what used to be described as “mercenaries” to protect their energy industry projects. That phrase has fallen out of favour.
Again, his appearance was entirely self-interested, and some context would be useful.
Last week, we covered developments in Mozambique as jihadi rebels known locally as 'Al-Shabaab continue to terrorise the population of Cabo Delgado province where TotalEnergies has a US$20 LNG project due to restart for first gas in 2029.
Mozambique is a case study for the failure of private security contractors, which the government employed prior to the murder of over one thousand people in when ‘Al-Shabaab overran the town of Palma in March 2021, beheading and shooting civilians including oil and gas contractors.
Mozambique had initially contracted Russia’s Wagner Group in 2017 to try to overcome the guerrillas, but Wagner’s approximately 200 soldiers in the country were quickly defeated by the Islamist insurgents. Instead, the government then turned to South Africa’s Dyck Advisory Group and its compatriot the Paramount Group for manpower, helicopters, vehicles, and training to the national army.
The limitations of that strategy were exposed starkly when Palma fell and neither the national army nor the private security contractors proved effective. However, Dyck Advisory Group pilots were praised for rescuing people from the besieged town in their helicopters, braving Islamist fire to evacuate at least 23 to safety.
Rocked by the massacre, the authorities in Maputo subsequently turned to regional military powerhouse Rwanda to stabilise the security situation. Rwandan troops have been working in Cabo Delgado since 2021 to combat the insurgency alongside the Mozambican Army. The situation today is generally recognised to be much better with Rwandan forces there than in the days of Wagner and the other private military contractors from 2017 to 2021.
Now Mr Prince is back with a generic private equity firm, named the Frontier Resources Group, which he told the conference exists, “to make local sovereign capacity flourish,” and, “to help them deploy force if necessary.”
The timing of the usually low-key Mr Prince’s appearance on stage at the Cape Town show could well be linked to the fact that a few days before, the Financial Times reported that ExxonMobil’s Chief Executive had sought assurances from Mozambique’s President Daniel Chapo last week about security for the American major’s proposed LNG terminal, which it plans to construct beside the TotalEnergies facility near Palma.
If ExxonMobil wants security in Cabo Delgado before it approved final investment on its LNG plant, I feel that there are better solutions than Frontier Resources and Mr Prince.
It is worth reminding readers that Mr Prince is a former US Navy SEAL as well as the founder, CEO and Chairman of Blackwater, which won US$2 billion in US Government security contracts between 1997 and 2010.
This all went horribly wrong in September 2007, when Blackwater employees opened fire in the crowded Nisour Square near the Green Zone in Baghdad, killing 17 Iraqi civilians and seriously wounding 20 more.
Three Blackwater guards were convicted in October 2014 of 14 manslaughter charges, and another guard was found guilty of murder relating to the Nisour Square Massacre. All four were convicted in US courts by juries having been charged by the Department of Justice, lest you think this was an injustice. However, they were all pardoned by President Trump in 2020.
Mr Prince was forced to step down as the CEO and sold the business in 2010, claiming he had been, “thrown under the bus,” after the massacre.
He then moved to Abu Dhabi in 2010, where he was hired by the Crown Prince to organise foreign troops for the Emirates and formed a new firm called Reflect Responses. He later trained Somalis in anti-piracy operations in the Gulf of Aden with UAE funding, he claimed at the recent event in South Africa.
In 2021, he sold his Frontier Global Services group to Chinese state interests and stepped down from executive duties with the firm.
If Mr Prince is the solution, the problem is probably being framed incorrectly. He’s a man without conviction who knows how to sell a contradiction, to use the Culture Club hit's lyrics. I can see blood red and gold as recurrent themes in Mr Prince’s life, however.
The third Karma Chameleon colour was green. Finally, we can agree. Italian state oil company Eni has been busy offshore with a triple set of green lights.
The company is resuming offshore exploration off Libya as Reuters reported this weekend. Libya’s National Oil Corporation (NOC) confirmed on Sunday that Saipem’s semi-sub Scarabeo 9 is currently re-entering an offshore exploration well, which was suspended by a Valaris rig in early 2020 due to the Covid crisis.
The NOC said that exploratory well C1-16/4 is situated in Contract Area D, previously known as MN 41, in the offshore region northwest of Libya in a water depth of about 743 metres, approximately 95 kilometres from the Libyan coast and around 15 kilometres from the Bahr Es Salam gas field.
Eni also confirmed its final investment decision in Mozambique for the deepwater Coral North floating LNG plant in the Indian Ocean, its second such unit there. The signing took place in Maputo on October 2, in the presence of the President of Mozambique, Daniel Chapo, and Eni’s CEO, Claudio Descalzi.
"[The] Coral North project leverages Eni’s unmatched exploration skills, our trademark fast-track and capital disciplined development capabilities, Mozambique’s vast gas resources and its strategic geographic position," Mr Descalzi commented.
"With Coral North, we will contribute to supply the worldwide growing demand for LNG, doubling both Mozambique's contribution to global energy security, and the benefits for the country and its citizens in terms of economic and industrial growth."
The third green light from Eni was the news that the Italian major had exercised an option to extend Ventura Offshore’s 2012-built semi-sub SSV Catarina for work offshore Kalimantan province in Indonesia. Oslo-listed Ventura announced the good news on October 1.
Ventura reported that it expects the exercise of this first optional well to keep the rig utilised into the first quarter of 2026 and increase the firm backlog of the company by approximately US$10 million.
We covered Ventura’s purchase of SSV Catarina in 2024 here. The rig started working for Eni in August of that year.
Indonesia is finally moving ahead with developing its deepwater gas reserves off Borneo. Now it needs to monetise the Abadi LNG project in the Arafura Sea and the new discoveries in the Andaman Sea off Sumatra.
Red, gold and green supplanted by blue, black and green.
Background reading
The CIMC website has the company history here including a cool map of where the rigs built by its CIMC Raffles shipyard are working.
Do read Erik Prince’s Wikipedia page for more context on this man born into privilege and whose sister Betsy DeVos was Education Secretary in President Trump’s first time in office. His own website is here and you and apply for a job with him via the page.
Here is the Oxford Political Review piece on why the Wagner Group failed in Mozambique.
A comprehensive listing of Somali piracy attacks is here.