In Joseph Conrad’s first commercially successful novel Chance (1913), the narrator describes, "one of those dewy, clear, starry nights, oppressing our spirit, crushing our pride, by the brilliant evidence of the awful loneliness, of the hopeless obscure insignificance of our globe lost in the splendid revelation of a glittering, soulless universe."
Who hasn’t felt that standing at midnight on the bridge of a ship ploughing a solitary course through the dark and pitiless ocean?
But one company has lost its “awful loneliness.”
DeepOcean has bought Shelf Subsea.
Unfortunately, since neither party is publicly listed, yet, financial details are sketchy. Since 2017, DeepOcean has been owned by European private equity house Triton Partners, so it doesn’t publish its financial results, only snapshots (here). So, neither DeepOcean nor its parent Triton announced the price it was paying for Perth-based subsea player Shelf.
And Shelf Subsea was sold to Triton by SCF Partners, another private equity player, along with Viburnum Funds, and its founders, so they too did not reveal the price, nor the company’s financial results for 2024, nor any preceding year.
The sale has been a long time in the making, with the process kicking off more than a year ago and attracting the attention of both US private equity funds, Singapore-based ship owners, and others.
Shelf Subsea was founded in 2015 as the offshore downturn began to bite, through the purchase of the Australian assets and operations of CalDive.
From its roots in diving, it diversified in 2017 into remotely operated vehicles (ROVs) by buying the assets of Singapore’s Bibby Offshore Asia, and then it added survey capabilities by taking over Bintang Subsea.
It initially had a close partnership with cross-town neighbour MMA Offshore, whose subsea vessel MMA Prestige it often utilised, until MMA acquired Neptune Marine Services, a rival Aussie ROV player, in 2019, and became a competitor of Shelf’s.
Shelf has an impressive geographic footprint across Saudi Arabia, Australia and Southeast Asia, but remains asset-light.
Rather than owning ships, the company holds long-term charters on its three main dive support vessels, being the 2017-built Southern Star, from Tasik Subsea, 2010-built Southern Nova (ex-Crest Odyssey 1, ex Fire Opal), and the largest and most modern vessel, the 2019-built Oriental Dragon.
In this respect, Shelf is a perfect fit for DeepOcean. Despite its billion US dollar backlog of contracts, DeepOcean is also asset-light.
The company owns 50 ROVs but charters in its fleet of 14 subsea vessels from a range of owners, including three ships from Østensjø Rederi (being Edda Freya and Edda Flora, which are chartered through 2026, and Edda Fauna, which DeepOcean has contracted to end of 2027), three from Hornbeck Offshore, and other vessels from other owners including Norway’s Siem, Solstad and Olympic.
Øyvind Mikaelsen, CEO of DeepOcean, commented on the development via a company press release celebrating the unpriced acquisition:
“DeepOcean and Shelf Subsea offer similar services, but have distinct geographical strongholds that complement each other. When combined, we will provide customers worldwide with access to a comprehensive pool of expertise and capabilities.
"We look forward to combining our leading technology and innovative solutions with Shelf Subsea’s operations in the Asia-Pacific region, as well as gaining valuable learnings from their leading project model. We are very impressed by the customer relations built up by the management of Shelf Subsea,”.
Triton has owned DeepOcean for eight years now, a long time for a private equity player to own a company. The acquisition of Shelf Subsea looks like the final piece of the puzzle ahead of DeepOcean’s own sale, probably via a public listing in Oslo.
The Shelf purchase will give DeepOcean a credible story that it is more than just a dominant player in the moribund North Sea; it is now a global player with global reach. The Shelf revenues will boost the Excel spreadsheet of forward earnings in the prospectus, keeping the revenue and gross operating profit numbers on an upward trajectory.
Historically, ROV and DSV owners who don’t own their vessels have struggled over the full offshore cycle as a rising market always sees shipowners raise and raise their rates and squeeze margins. Now is the perfect time for Triton to sell DeepOcean – before greedy vessel owners start to become too unreasonable on the extension of their term charters.
What other splendid revelations of the glittering, soulless universe can we share?
Time for some wind news.
Going back to the Conrad quote with which we opened our piece… With the Trumpian backlash against wind in full force, Equinor, Ørsted (in which Equinor is now a 10 per cent shareholder) and local player Dominion Energy have certainly seen the US President oppressing their spirit and crushing their pride.
There was good news last week, however, when Equinor was allowed to resume construction on the US$5 billion Empire Wind project off the coast of New York City, 25 kilometres south of Long Island. The American Federal Government reversed an order in force since April 16, which had halted construction on the 810MW windfarm development.
The stoppage was costing Equinor US$50 million a week, as Reuters reported, and the company had threatened to walk away entirely.
However, Equinor confirmed last Monday night that the Department of the Interior’s Bureau of Ocean Energy Management had allowed the project to continue. Of course, the price of continuing the project was obeisance to the man who created the problem in the first place. Anders Opedal, the CEO of Equinor, made the following comment in the company’s press release:
“We appreciate the fact that construction can now resume on Empire Wind, a project [that] underscores our commitment to deliver energy while supporting local economies and creating jobs. I would like to thank President Trump for finding a solution that saves thousands of American jobs and provides for continued investments in energy infrastructure in the US.”
Regardless of your position on the economics and environmental benefits of offshore wind, arbitrary government action against lawfully approved projects that are underway is a terrible way to attract investment.
If the US wants to go down the path trodden by such economic powerhouses as Venezuela, Guinea (which revoked 46 foreign mining licences earlier this month) and Mongolia (which is trying to nationalise the country’s largest copper mine), the consequences are likely to be predictably dire.
Successful policy requires consistency. Having earmarked the National Security Council (NSC) as the driving force for the supposed revival of American shipbuilding, of which I am sceptical, last Friday afternoon saw mass redundancies in the agency as around half of the staff in Washington were fired.
The shipbuilding and maritime desk survives, apparently, but it is clear that the NSC has been reduced in influence and resources. A White House official told Axios that, “the NSC's focus would be to 'coordinate and advise — not carry out — policy'."
Happy Memorial Day to our American readers. But whilst Americans enjoy the break, let’s digest three new wind investments, two jackups, and a windfarm project.
Even as the future of the second phase of Empire Wind in the USA looks unlikely to proceed, Equinor did announce some good news for the beleaguered wind sector in Europe last Friday.
Equinor and its partner, the Polish utility company Polenergia, have confirmed the final investment decision (FID) to proceed with their for their 1.44GW Baltyk Two and Three offshore wind projects, each with 50 turbines to be located in the Baltic Sea, respectively, 22 kilometres and 37 kilometres offshore, north west of Gdansk.
Equinor will open an operations base to support the project in the port of Leba. The two partners are also looking bidding on the Bałtyk One project with capacity of up to 1,560 MW in the second phase of Poland’s offshore wind development.
Poland remains one of the few European countries where the largest source of power generation still comes from coal, the filthiest and most polluting fuel, so the expansion of the offshore wind sector in the Baltic can only be welcomed. Would that China, Indonesia and India were also shrinking their coal generation capacities.
Any boom will always continue as long as there are those who keep the faith. In April 2014, everybody’s favourite Greek shipowner George Economou signed a newbuild contract with Samsung Heavy Industries for two deepwater drillships, Ocean Rig Crete and Ocean Rig Santorini, on a completely speculative basis at a price tag of US$700 million each.
They were to be the last newbuild drillships ordered. Ever (well, at least until today).
Within a few months of the ordering being signed, the oil price and the drilling market crashed. Mr Economou’s Ocean Rig went into bankruptcy in 2017, although he made a packet on the cancellation of his management contracts when the company was sold to Transocean in 2018, which then abandoned the two partially completed hulls in the yard and forfeited the deposit.
The rigs were eventually acquired by Stena Drilling and Saipem for a fraction of the price paid by Mr Economou in 2022 and 2024.
History rarely repeats itself, but with the recent setbacks in offshore wind, we were surprised to see two players doubling down.
Rather like the plot of Conrad’s novel Nostromo (spoiler alert), I am not seeing a happy ending.
Cadeler announced on Thursday that it has agreed to acquire Boqiang 3060 – a newly-constructed jackup wind turbine installation vessel (WTIV) – from the Shanghai Boqiang Heavy Industry Group, to enable the Danish player to better compete in the offshore wind turbine operations and maintenance market.
Currently, Cadeler’s fleet is focused on the turbine installation segment, so this represents a more stable and predictable revenue source than construction operations, and it has launched a new subsidiary called Nexra to provide the said service.
The vessel will be renamed Wind Keeper, a name that the company says symbolises, “the vessel’s position as a rare and valuable find – a true 'keeper' – and her focus on ensuring the up-keep of green energy generation through the provision of O&M services to the offshore wind industry.”
Honestly, who writes this guff?
Wind Keeper will be deployed alongside the smaller, older ex-Eneti units Wind Zaratan and Wind Scylla in the Nexra-branded maintenance business.
Anyway, no price was announced for the Wind Keeper purchase, so we will have to comb through the footnotes of the next set of accounts of the Danish company. Like all the rig owners in 2014, Cadeler maintains that there is no danger of a slowdown in wind installation activities in its core markets even as Ørsted decided to discontinue the massive Hornsea Four project in the UK as the economics just did not stack up.
As usual, Cadeler’s first quarter 2025 results were dreadful. The company operated no less than seven WTIVs with a book value of over US$2 billion in the January to March 2025 period.
Unfortunately, it managed to make a net profit of (drum roll) just US$2 million, being US$3,100 per WTIV per day, less margin than Tidewater makes on a small platform supply vessel.
Cadeler is now on track to borrow over an additional US$1.5 billion on top of the US$1 billion it already owes and has taken to reporting its backlog as assuming that all the optional extensions to its contracts will be taken.
Readers with long memories will recall that when Cadeler floated in late 2020, both it and its rival Eneti (with which it merged) had much impressive data to show that there would be a global shortage of WTIVs in 2025 and that WTIV day rates would rocket.
Strange to say, in the first quarter results, Cadeler now forecasts that, “undersupply of installation vessels is expected from 2028,” on the graph on page 19. Bread today, jam tomorrow, kids.
The only thing that has not seen an undersupply is the Cadeler overhead. There was another 33 per cent increase in the company’s shore overheads to US$18 million over 90 days, meaning that It costs Cadeler an incredible US$28,000 per day per WTIV in shore costs.
To put this into perspective, in its first quarter filing, driller Noble Corporation was operating each of its 38 rigs with a shore overhead of less than US$1 million per rig for the same quarter (US$11,000 per rig per day).
Deepwater drillships and semi-subs are significantly more complex than WTIVs and I don’t see Cadeler’s administrative and managerial splurge as ending well for the company, even as its leadership add to their salaries, bonuses and empires.
A memorandum of understanding (MOU) is not the same as a newbuilding contract. One does not always lead to the other.
Following on from Taiwanese owner Dong Fang Offshore’s triple order for service operation vessels at Vard in Vietnam, and for a large offshore construction vessel, and an investment in Taiwan’s first offshore helicopter company, we were surprised to see that UAE shipyard Lamprell had signed an MOU with Dong Fang for a newbuild WTIV.
The newbuild vessel on which the companies are collaborating will support offshore wind activities in the Asia-Pacific region and will be designed to accommodate the latest generation of turbines, the parties said.
Dong Fang entered the offshore wind market through the incredibly well timed purchase of the distressed subsea vessel Pacific Constructor from embattled Swire Pacific Offshore in 2021 and by buying the cable layer and subsea ship Polar Onyx from GC Rieber Shipping in early 2022 for a bargain basement price.
It now has US$300 million of commitments for newbuilds and the new WTIV will probably cost another US$300 million. These are not bargain basement acquisitions. The company has gone from savvy spender at the bottom of the offshore market to potentially paying top dollar at the peak of the wind boom.
It’s a bold call for a company focused on one market – Taiwan. Let’s see when the newbuild is ordered and into what stage of the market cycle it is delivered.
Background reading
If you want a sordid story of oligarchal in-fighting and Kremlin cronies, dead Georgian businessmen and British “wealth managers” filing lawsuits about corruption in Uzbekistan, Byeline Times has just the article for you.