COLUMN | The Twelve Days of Christmas 2022: Day 4 to 6: Global Marine, Jan de Nul, Seatankers, Østensjø Rederi, Reach; Transocean and DSME; liftboat safety [Offshore Accounts]

On the first day of Christmas my true love gave to me… a partridge in a pear tree, according to the ancient English carol, but at Baird Maritime, that’s the cue for a dozen topical features on the offshore industry. Lovers of festive traditions and even those who are mildly observant will note that it’s now mid-December, so, for the third year in a row, we are running through the Twelve Days of Christmas, but from an energy perspective.

The first three days appeared last week (here) covering the legal misfortunes of Isabel dos Santos, the Saverys family’s hydrogen-powered pair of windfarm support newbuilding orders at Damen, and a trio of LNG projects moving forward in Asia and East Africa.

Four Calling Birds… Subsea Deals

Subsea deals are like buses. You wait bored for a long time, and the only buyer appears to be Dong Fang Offshore in Taiwan, then suddenly all the Norwegians are buying and selling like the market was on fire. Specifically, four vessels were bought and sold.

Two weeks ago, we lamented the failure of former market leader Global Marine Systems to invest in new vessels (here), noting that the cable manufacturers Prysmian, NKT and Nexans were eating its lunch, whilst the big five integrated contractors from the Lowlands were devouring its dinner, and even Cecon had emerged to drink the coffee.

Global Marine shrinks again

Global Symphony (Photo: Jan De Nul)

The day that story appeared, right on cue, Global Marine announced it was selling one of its dwindling fleet of vessels to Jan de Nul. The 130-metre-long trenching unit Global Symphony with its 150-tonne crane, 105-passenger capacity accommodation, and two work-class remotely operated vehicles (ROVs) was sold for an undisclosed price– specifications here. Despite being built in 2011, the ship was actually one of the younger vessels in the Global Marine fleet.

Game over. I wouldn’t be surprised if the rump of the Global Marine business isn’t sold for a small margin over book value in 2023 by its cash-hungry private equity owners, probably to Orange or Louis Dreyfus Armateurs. For years, investors have criticised British businesses for being short-termist and for failing to invest. Serial cash splurger Ocean Infinity seems to be the sole major exception to this rule, although its parent is registered in a Caribbean tax haven.

Global Marine exemplifies the problems of British management – a former world-beating company now milked dry as a cash cow by a string of disinterested private equity owners since it was rescued from the train crash of Global Crossings in 2004.

Toisa us, as Fredriksen snuggles up to Østensjø Rederi

Someone who isn’t afraid to invest is John Fredriksen, who has talked a good talk on offshore wind power without actually putting too much of his own money in (here) – he was a “corner-stone investor” in the Edda Wind share offering in 2021 and invested US$23 million from a family trust.

However, at the end of November, he scored a coup, buying two of the last modern subsea vessels from China. These are a magnitude of investment higher than his wind stake.

When we saw that his Seatankers company had bought Hai Min An and Guo Hai Min Kang out of China, we scratched our heads. What were these ships and where had they come from?

Reveille provides wake up call on abandoned subsea vessels

Edda Sphynx, formerly Toisa Reveille (Photo: MarineTraffic.com/Paul Misje)

Then we remembered Toisa Reveille and Toisa Resolute! These were the orphans of Toisa, the Gregory Callimanopulos-owned offshore company, which went spectacularly bust in the downturn and was liquidated by its unlucky lenders in 2018. Mr Callimanopulos had successfully defended a lurid and high-profile sexual harassment claim in 2014, which was dismissed (here), but he could not defeat Toisa’s creditors. His offshore empire ran out of cash, just he had embarked on a massive newbuilding programme in China, building some of the loveliest, most high-end ships ever built there.

Some of his construction vessels were quickly snapped up – 2009-built DSV Toisa Pegasus was purchased by Subsea 7 for US$39 million in November 2018, and the DP3 newbuild Toisa Patroklos was bought for US$95 million by Allseas in 2017 from the shipyard. The Ulstein HX102 design ship is now named Fortitude and Allseas paid less than half its order price, but Toisa Reveille and Toisa Resolute were abandoned in Qingdao Wuchuan Heavy Industry shipyard.

Orphaned in Qingdao

The two Salt Ship-designed newbuild IMR support vessels were not sold, despite talk in a rival publication that there was a frenzy of Norwegian interest in the in 2018. There wasn’t, and the ships ended up being delivered in 2021 and operated in China by Chinese state companies, until Seatankers rescued the orphans.

Mr Fredriksen has chosen to place the 2021-built duo under the management of to Østensjø Rederi, which manages the Edda fleet, and they have been renamed Edda Sphynx and Edda Savanah. They are mobilising west now after stops in Singapore.

Mr Fredriksen is clearly close to Østensjø Rederi. He also bought the company’s massive DP3, 800-bed accommodation vessel Edda Fortis out of default from Hyundai Heavy Industries in Korea earlier this year for a rumoured price of US$80 million.

Investor in Edda Wind, owner of a former Edda accommodation vessel, and now owner of two subsea vessels that Edda manage… can we expect some kissing under the Christmas mistletoe between Mr Fredriksen and his new friends?

Reach the stars with Edda Sun

Edda Sun (Photo: Fugro)

And Østensjø Rederi is also the last player in our quartet of deals. Last month, the company announced it had sold its 2009-built subsea and ROV support vessel Edda Sun for US$29 million to Reach Subsea, with delivery due next year.

Reach had previously been in partnership with MMT of Sweden, and the two had a frame agreement stretching until April 2022 for the subsea vessel Havila Subsea, and a joint venture operating two Surveyor interceptor ROVs. Unfortunately, MMT was sold by billionaire Swedish lock-maker Carl Douglas last summer, putting Reach’s erstwhile partner into the hands of its rival Ocean Infinity.

Rendering of a Reach Remote USV (Photo: Reach Subsea)

Reach announced it would invest in a fleet of uncrewed surface vessels (USVs) dedicated to survey, inspection, and light repair projects, an initiative called Reach Remote. Norwegian shipping investor Wilhelmsen then subscribed for new shares in Reach equivalent to a 21 per cent stake earlier this year, as well as its investment in Edda Wind. This Wilhelmsen investment supported the commercialisation of the Reach Remote concept. Reach Remote puts the company in head-to-head competition with Ocean Infinity and its former partner MMT, and with Fugro.

Go Electra gone for four years

The purchase of Edda Sun and the chartering in of the multipurpose ROV support vessel Go Electra on a four-year firm time charter with an option to extend for one year show that Reach is back. It suggests that the company still sees value in crewed vessels at least until Reach Remote has attained scale and a track record.

The year 2023 will be the year that Ocean Infinity tried to prove its Armada concept at scale with trials of the remote operation of its first 78-metre long ships, which have just been delivered from Vard’s Vung Tau facilities in Vietnam.

The battle of the subsea robots isn’t over, and Reach’s Edda Sun acquisition and its ongoing charter of Go Electra allow it to fight on both fronts, both with smaller high-tech USVs, and with traditional crewed survey and subsea vessels.

Five Gold Rings Stranded Drillships

It wasn’t just the brace of Toisa subsea vessels that were abandoned in yards when the hard times hit offshore in 2015. Dozens of rigs were orphaned as their owners went bust or defaulted on their contracts and left the units with the yards.

West Aquila (Photo: Daewoo Shipbuilding and Marine Engineering)

As per rig data firm Esgian (here) there are now only five stranded deepwater drillships left at Asian yards outside China, after Transocean and a consortium of private investors moved to acquire the former West Aquila. This was one of many rigs that were ordered in the last boom but were abandoned by their owners, the contracts cancelled or defaulted upon, and the units left in a nearly finished state at the shipyard. According to Esgian, there is currently just one unit left at Daewoo Shipbuilding and Marine Engineering (DSME) in Korea, three at Samsung Heavy Industries, and one at Keppel FELS in Singapore. The latter is Keppel’s own Can Do, a speculative build that was ordered by the Singaporean yard from itself with awful timing late in the cycle. Our coverage of Keppel’s legacy fleet issue is here.

Transocean buys what Seadrill left

Santorini (Photo: Saipem)

Transocean and its partners Perestroika and funds managed by Lime Rock Management have formed a joint venture, Liquila Ventures, and paid around US$200 million for the drillship.

This move to mop up one of the last few drillships follows the decisions earlier this year by Saipem to charter Santorini and by Stena to charter Stena Evolution, drillships that were abandoned by Transocean itself after the ill-timed (with hindsight) purchase of Ocean Rig. In 2019, we reported here how Transocean subsidiaries decided to relinquish their respective interests in two drillships under construction at Samsung Heavy Industries, and throw back the keys of the drillships Ocean Rig Santorini and Ocean Rig Crete, saving Transocean an estimated cash outlay of US$1.1 billion.

Last week, Saipem confirmed it was purchasing Santorini from Samsung, paying US$230 million later this month to close out the acquisition of the seventh generation drillship, which it is currently operating drilling wells in the Gulf of Mexico for ENI under the bareboat (here).

Finally, the falling knife is caught

As we reported here, John Fredriksen’s Northern Drilling had picked up two unfinished Seadrill drillships at DSME during Seadrill’s first restructuring. Northern agreed to purchase West Aquila and West Libra for US$296 million each in 2018, and Northern paid US$90 million for each rig at contract signing, with the remainder to be paid to the yard upon delivery. Northern then cancelled in 2021, and went to court with the shipyard, citing repudiatory breach by Samsung and delayed delivery.

Now Transocean and friends have secured the rig for 30 per cent less than Northern was willing to pay in 2018, even though the market is now significantly stronger than it was then. West Libra also remains in Korea. Surely a tempting target, too?

There are, of course, a quartet of midwater drillships being built in China, abandoned by Opus Offshore in 2015 (the Opus Tiger-1 and sisters – see here and here). But owners who have taken units from Korea have demonstrated the high standards of preservation that the country’s yards have maintained on the units, and the high standards of initial construction.

The Transocean deal is excellent news for the speculators holding the nearly-new Deep Value Driller drillship in Norway, and for the Turkish state oil company TPAO should it discover that owning and operating four deepwater drillships in a country like Turkey is a little optimistic….

Welcome back as a buyer, Transocean. You’ve given the perfect Christmas gift to Samsung, and to the shareholders in Deep Value Driller. Who will snap up the final five gold drillships?

Six Geese Liftboats a-laying (on the seabed!)

Since we have used the “Oops I did it again” line previously (here), we can’t in good faith use it a second time to headline a story.

However, when we read that the jackup Trinity Daniela had capsized and sunk in shallow water off Trinidad (here) whilst demobilising from Heritage Petroleum’s North Field, we did a double take. Fortunately, all six crewmembers are safe after the vessel toppled and sank in the Gulf of Paria on November 30.

Another liftboat sinking? Again? WTF?!

Way back in December 2019, we were all over the Singapore flag state and Philippines littoral states (here) for their tardiness producing an accident investigation for the sinking of the liftboat Teras Lyza. The liftboat capsized and turned over on June 5, 2018 whilst under tow in the South China Sea for beleaguered Singaporean owner Ezion (now in liquidation). Fortunately, Teras Lyza was unmanned when the accident occurred. The stricken jackup was later towed away, scuttled, and sunk in deep water off the Philippines by Resolve Marine, its salvors, in August 2018.

Singapore said the Philippines was responsible for producing the report as the littoral state, and the Philippines said it was thinking about writing the report, but as far as we know, it was never made public.

In that article, we highlighted the appalling safety record of liftboats showing a litany of accident reports in the Gulf of Mexico from the 1980s compiled by industry expert Bill Stewart (here). The compilation showed that punch-throughs and capsizings were all too common then. One well-respected and well-known liftboat designer, Mr Ajay Suda, wrote to us (here) to tell us we didn’t know what we were talking about, and that the incidents in our background reading section were all historic and involved liftboats of “very old designs.”

Still happening, over and over

The liftboat Seacor Power sinks in bad weather off Port Fourchon, Louisiana, April 13, 2021. Thirteen of the crew are feared to have died in the incident. (Photo: US Coast Guard)

Unfortunately, after the sinking of Teras Lyza, two more liftboats were lost in the Gulf of Mexico – Ram XVIII through the collapse of a leg in November 2018 (here) and Kristin Faye through a punch through in September 2019 (here). Surprise!

July 2020 saw a fourth accident of note in China, albeit with completely different dynamics. The jackup installation vessel Zhen Jiang suffered a catastrophic failure whilst installing turbines at the CSIC Jiangsu Rudong H3-1 offshore wind farm. The vessel’s jacking system failed during turbine installation, and when the tide rose, the leg was stuck, and Zhen Jiang took on water and was lost.

Then in 2021, there was a horrible accident in the Gulf of Mexico when the liftboat Seacor Power was caught in weather, which rapidly deteriorated after the unit departed Port Fourchon, Louisiana on April 13, 2021 (here). Seacor Power quickly turned over, with the tragic loss of thirteen lives in that squall. The official American investigation report is available online here.

Former Teras Fortress 2 follows Teras Lyza

Then a second Chinese liftboat was lost this summer, as reported by Upstream here. This was the former Teras Fortress 2 — which had been renamed the Shengping 001 when it was purchased by Tianjin Jincheng Offshore Engineering on December 30, 2020 for US$22 million (here).

The new owners took the liftboat to Huangpu Wenchong Shipbuilding and fitted a new crane with a 1,600-tonne lifting capacity for wind turbine installation. Four crewmembers are believed to have died when the vessel partially capsized in July whilst working off the coast of Guangdong province for the China Guangdong Nuclear Power Group. Shengping 001 apparently struck an offshore wind foundation and capsized. China does not make offshore accident reports public so the exact details of what happened is not known.

What is going on? There are twice as many jackup drilling rigs as liftboats, but in the same period from 2018 to 2022, only one jackup rig, to my knowledge, was lost – a punch through off Malaysia led to the sinking of the Velesto-owned jackup rig Naga-7 whilst preloading prior to commencing drilling a well for ConocoPhillips. The rig took on a dangerous list after the leg buckled, and the crew were all safely evacuated, thankfully.

Statistics of liftboat losses are grim

One jackup drilling rig was lost from a fleet of four hundred, compared to seven liftboats from a global fleet of less than two hundred. Why are the insurers so complacent? Premiums need to rise, surely, and flag states need to be proactive in agreeing on better design standards and operational standards.

Our festive appeal is for an urgent review of liftboat safety. Each case seems to be considered by flag states and littoral states individually as an “ad hoc” accident to be investigated on its own merits, without reference to the appalling safety record of this category of vessels as a whole.

The litany of seven disasters in just five years is shocking. Lives have been lost and the liftboat industry needs an urgent look at operating procedures to prevent future incidents. These units are manned and often work in close proximity to live platforms. The larger jackups accommodate over one hundred passengers and crew. Thirteen men died in the Seacor Power sinking while four perished in the Shengping 001 accident. The next loss could be even more tragic, if there is a full complement of passengers onboard.

Our Christmas wish – make liftboats safe

It shouldn’t need a publication like Baird Maritime to publicise that something is very, very wrong in the liftboat sector. Operating procedures need tightening, probably with better site surveys and geotechnical work on location made mandatory, designs need to be reviewed to improve stability, procedures tightened, and lessons need to be shared between the different regulatory bodies and owners, so that the whole sorry safety shambles is reviewed from the top down, holistically.

My New Year’s wish for 2023 is that there are no more liftboat losses. We await your recommendations, Mr Suda, sir!

Background Reading

VesselValues’ Robert Day is one of the smartest guys in the industry, in our opinion. He produced a wonderful account of what happened to the Toisa fleet for Offshore Engineerhere and here. He didn’t include the two abandoned newbuildings that Seatankers just bought, however.

Trinity Offshore’s liftboat fleet and outline specifications are here.

Our 2020 Twelve Days of Christmas featured some classics, which have stood the test of time nicely (here and here) covering Cairn Energy (as was), Esvagt, Vantage Drilling, Shearwater, Swire Pacific Offshore and Seacor, followed by the oil price, floating wind, ammonia fuel cells, Myanmar, Bourbon and Standard Drilling (as was).

Our 2021 Twelve Days of Christmas (here, here and here) featured Cairn Energy becoming Capricorn Energy, Vantage Drilling, North Star and Vard, Shearwater and Shell, Windcat Workboats, Swire Pacific Offshore, ammonia fuel cells, the oil price, Myanmar, Floating Wind, Bourbon’s revival and Standard Drilling (as was).

Best correction ever. If you don’t like what we write, you can contact the editor by emailing [email protected] – and feel free to propose stories to him too, especially if they feature anything to do with the numbers seven through twelve for the next episodes of the Twelve Days of Christmas. For a genuinely hilarious Christmas correction to bad journalism click here.


Hieronymus Bosch

This anonymous commentator is our insider in the world of offshore oil and gas operations. With decades in the business and a raft of contacts, this is the go-to column for the behind-the-scenes wheelings and dealings of the volatile offshore market.