![COLUMN | Loose ends? Suspensions update: Paratus and Borr Drilling; what could be next in Venezuela; DP World's latest mess [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2F2026-03-30%2Focs5z2os%2FUntitled.jpeg?w=480&auto=format%2Ccompress&fit=max)
Last week, we looked at the suspensions in the Arabian Gulf as Iranian missiles continue to strike Qatar, Saudi Arabia and the UAE, and how all the offshore support vessel and drilling rig owners involved seemed to be very coy on whether or not they were in fact receiving charter hire from their clients for vessels and jackup rigs that had been suspended during the conflict.
Saudi Aramco is apparently continuing most of its offshore operations for now, but most work off Qatar has been suspended. ADNOC Drilling has not made any subsequent announcement since an anodyne “confirmation of operational and financial stability” on March 3.
On March 24, the world’s largest owner of jackup rigs, ADES, owned by the Public Investment Fund of Saudi Arabia, finally made an announcement to the Riyadh stock exchange on the matter:
“A handful of the group’s offshore rigs in the GCC region have recently been subject to temporary suspensions due to the ongoing regional tensions. Based on the information currently available, the group believes these suspensions are short-term in nature.”
A handful of rigs is how many, exactly? And what gives ADES the confidence that the suspensions are short-term in nature?
Anyway, not to worry, the company also forecast higher revenue and profit for 2026, an unusual step for a company whose largest centre of operations is caught up in an unpredictable and violent conflict between Israel, the United States and Iran.
Maybe ADES should not be so confident. The foolhardy futuristic Neom development in the north of the kingdom, a US$500 billion construction project also owned by the Public Investment Fund, suspended all work on the Trojena mountain ski resort last week. Neom cancelled a US$4.7 billion contract with Italy’s Webuild Group to build three dams to form a freshwater lake from which the snow would be produced, and cancelled the contract with Malaysia-based Eversendai Corporation for the steel for the site. In February, we noted that Trojena would no longer be hosting the Asian Winter Games.
In a war, the extravagant vanity projects are always the first to be axed, but Saudi Aramco contractors should beware. It is business as usual for now offshore in the Kingdom, despite some fields being temporarily shut down, but how long would it be before vessel and rig owners are summoned to meetings with the state-owned oil giant and asked to share the pain? The war is devastating the budgets of all the Gulf states, and how it will end, or when, is not at all clear.
We all hope that there is peace and that the Strait of Hormuz reopens quickly, but who knows? All bets of ADES’ 2026 profits should probably be off for now, rather like the opportunities for downhill slalom in Trojena.
Whilst the world’s largest jack up operator, ADES, finds itself literally caught up in the crossfire in its largest market in the Gulf, the world’s fourth largest jackup operator, behind COSL (with forty eight) and Valaris (soon to be part of Transocean with 31 jackups), tied up some loose ends in Mexico and moved up into third position in the jackup fleet rankings.
I write, of course, about Borr Drilling, which announced that it would be growing its current fleet of 29 jackups with the addition of another five rigs owned by Fontis, the Mexican subsidiary of Paratus Energy Holdings, which it will hold in a joint venture with its Mexican well construction partner.
Mexico has been something of a “difficult market” for both Borr and Fontis, on account of the chronic cash flow problems of Pemex, the heavily indebted state oil company there. Paratus noted in its press release that the sale of the five rigs “will significantly improve the operational risk profile by reducing exposure to payment irregularities, potential contract suspensions and re-contracting uncertainty in Mexico.”
But now, hot on the heels of the acquisition of five rigs from Noble for US$360 million, which have been handed over to Borr in January, Borr is doubling down on Mexico, where it currently operates four rigs on contract, plus 2020-built Hild warm stacked there. Notwithstanding the payment irregularities, potential contract suspensions and re-contracting uncertainty in Mexico.
Borr’s press release set out the terms of the deal:
“The acquisition will be completed through BC Ventures, a newly established 50/50 joint venture between subsidiaries of Borr Drilling and its long-term well construction partner in Mexico.
"Under the transaction, the joint venture will acquire the rig-owning entities, which own two Friede and Goldman JU-2000E design rigs and three LeTourneau Super 116-C design rigs. These five rigs are currently located in Mexico.
"The transaction is expected to be financed through a US$237 million non-recourse seller's credit, in addition to a cash contribution of US$25 million from each of Borr Drilling and its local partner at closing. The seller's credit will have a 2.5-year maturity from the date of closing and will be secured by, among other things, a first lien on the five jack-up rigs.
"The transaction is expected to close within Q3 2026, subject to customary closing conditions, including merger control approvals.”
US$57 million a rig seems a good deal, and once again, heavily-indebted Borr is relying on the sellers of the rig issuing it credit, so it pays very little up front. When it bought the quintet of Noble rigs in December, Borr paid US$210 million in cash and received another US$150 million in seller’s notes from Noble. This time, however, Fontis gets a pittance at closing, just US$50 million, and receives an IOU from Borr for US$237 million.
As of December 31, 2025, Borr had total outstanding borrowings of US$2.21 billion and paid US$228 million in interest for that year. Those debt and interest figures will be higher in 2026, depending on how the US$237 million in seller’s credits from Fontis to the new joint venture are treated on the Borr balance sheet.
Don’t panic, but the net cash provided by Borr’s operating activities was only US$252 million during 2025 full year as per its annual report. That is just US$24 million above the cash generated from operations. The company reported a net profit of US$45 million for last year in its detailed annual report, but I would expect an equity raising to bring down the debt and stabilise the situation, especially now that Borr’s shares are at one-year highs and it has US$1.259 billion of debt, which needs refinancing in 2028, not a long way away.
The stock market loved the Fontis deal and the Borr shares rose 20 per cent from opening on Monday, when the deal was announced, to close on Friday at US$6.05 per share, and the shares have nearly tripled in a year up from US$2.28 on March 28, 2025. Borr now has a market capitalisation of US$1.9 billion, and an enterprise value of over US$4 billion (being its debt plus its equity).
Clearly, the deal gives Borr a bigger market share in Mexico and pricing power in that market, where it is the undisputed jackup rig leader with ten units. With over 150 jackups trapped in the Gulf by the war and its biggest competitors COSL (focused mainly on its domestic market) and Valaris (in the process of being taken over by Transocean, which had completely exited jackups to focus on the deepwater market), Borr is number one in international shallow water outside the Gulf and China. Noble and Seadrill, the other large international contractors, have also mostly exited jackups.
I like the Fontis deal, I like how Borr puts in very little cash now, and I like the price of the rigs. However, the seller’s credit is likely to be expensive, doubling down in Mexico is risky, and Borr has a long history of making calls for its shareholders for extra equity to prop up its balance sheet.
I don’t expect this time to be different. The company has three rigs suspended in the Gulf and four rigs warm-stacked. A higher share price is a great excuse to raise new capital. Shareholders, prepare to reach for your pockets.
It is not just Mexico and Borr where I don’t think things will be different.
In January, the eyes of the world were on Venezuela, when the US managed to seize and bring to court in New York the country’s long-standing President Nicolás Maduro and his wife.
Vice President Delcy Rodríguez quickly stepped up to assume “interim” presidential responsibility, promising better ties with the United States, and an opening up of the moribund oil and gas sector, where the combination of incompetent and corrupt management by Maduro and his cronies, and crippling sanctions from the US, had reduced oil production to less than one million barrels a day.
Now that the media has moved on, it is worth to consider what is happening there now.
The first headline we saw is not promising. When the Financial Times states that “Venezuela’s ‘chief torturer’ takes over the military”, you don’t exactly get a warm and fuzzy feeling that the country is on the right track. The excellent Joe Daniels and Ana Rodríguez Brazón reported the following:
“For a decade, Gustavo González López oversaw Venezuela’s torture dungeons and spy networks. His secret police became a cudgel for strongman Nicolás Maduro. Opponents disappeared, protesters rounded up, and González was sanctioned by the US, EU and UK. Now, in a bid to shore up power, the US-backed interim President Delcy Rodríguez has promoted the baby-faced 65-year-old to defence minister.”
That should set alarm bells ringing, even as western investor circle after some legal reforms for foreign investors in oil and gas from the interim president, and the loosening of American sanctions after the fall of Maduro, have made the country less unattractive to invest in. I hesitate to write “more attractive” in a situation where the general population remains impoverished and immiserated, the country’s oil infrastructure is dilapidated and failing, and the thugs and gangsters surrounding Maduro still have control of the state.
Chevron is the only American player with operations in Venezuela, and there are rumours that it is looking to step up investment offshore. It operates in a joint venture with PDVSA, the state oil company, based on a 2022 US exemption licence from sanctions.
Exxon sent a delegation to Caracas last week to look at opportunities, and Upstream reported that Shell is looking to proceed with the development of its offshore Dragon gas field, which lies in Venezuelan waters near Trinidad and Tobago, and which could be developed quickly and easily by laying a pipeline to Shell’s existing gas export systems in Trinidad.
Dragon holds an estimated 4.2 trillion cubic feet (119 billion cubic metres) of gas, and journalist Davide Ghilotti reported it, “would be developed with three initial wells and a 16-kilometre subsea pipeline linking the field to Shell’s liquefaction and export infrastructure in Trinidad.”
This seems a cheap and sensible way to develop increased production quickly. But if the new minister of defence has so much blood on his hands, what changes can the oil majors really expect from the Venezuelan generals?
If the generals are still around, the majors will need to proceed with caution.
If your company's chairman and CEO had been compelled to resign after he was featured in the Epstein files numerous times, including discussing torture videos and prostitutes with the notorious sex offender, you would have thought that maybe a corporate decision to maintain a low profile might be a good idea. Don’t court controversy and don’t remind customers or your government shareholder that for two decades, your business was run by someone who kept toxic company and had a proclivity for sex workers. Logical, right?
It is just as well you are not responsible for corporate communications and business strategy for Dubai’s state-owned ports, logistics, ferry and offshore support vessel player, DP World. Because having ditched its long time, now disgraced CEO and Chairman, Sultan Ahmed bin Sulayem, only last month, DP World has now decided that its next great business opportunity is… a joint venture where it will pay an undisclosed sum of money for 49 per cent of Fesco, a Russian container handling company, alongside its 51 per cent partner, Russian state nuclear player Rosatom, as we reported on Friday.
Idiotic Ballsy move, for a number of reasons. Where to start?
Firstly, with Russia still pursuing a bloody war of aggression in Ukraine, killing civilians on a daily basis and still subject to sanctions from most OECD states, the optics are not great. Paying cash to the Russian treasury for the Fesco acquisition looks like DP World directly funding the Kremlin’s war machine, which is continuing to kill Ukrainian children (here).
I am not sure I would want to be the commercial manager for the company’s fleet of platform supply vessels and anchor handlers showing up to customers with the mandatory company organisation chart featuring the Rosatom joint venture, or to explain to regulators in countries backing Ukraine quite why they should grant you a port concession when you are in a JV with a country that has engaged in sabotage, cyberattacks and assassinations overseas.
But I am sure the company’s lawyers have checked compliance with sanctions law very carefully, just like they checked compliance with UK employment law before they fired hundreds of mainly British seafarers in 2022. At least in Russia today, employees at Fesco can’t be fired by email like some of those 800 crew at P&O Ferries were, because, well, Russia has just shut down internet and mobile data services.
It is true that Rosatom is not fully sanctioned; however, the US Department of State has placed restrictions on the company’s senior officials, including CEO Alexey Likhachev and other members of the management board, citing their support for the Russian “defence” sector (I guess we can actually rename it what it really is – the war sector – like Defense Secretary Pete Hegseth did in the US). These designations result in asset freezes and prohibit US persons from engaging in transactions with the sanctioned parties.
The American Department of the Treasury’s Office of Foreign Assets Control, the European Union and the UK Government have also added specific Rosatom subsidiaries to their lists of sanctioned entities, but not its core nuclear operations. This is because US nuclear utilities imported approximately 25 per cent of their enriched uranium from Russia in 2024, and approximately 38 per cent of the EU’s enriched uranium supply in 2023 originated in Russia. Embarrassing, we agree.
However, just because something is not technically illegal, it doesn’t necessarily make it a good idea.
Secondly, when we last looked, the country providing the most backing to Iran, which has been firing missiles and drones into Dubai for the last month, is Russia. The UAE’s tourism and aviation industries have been devastated by the Iranian attacks, the Dubai Government is in full damage control mode, its business model is in tatters, and the Russians are alleged to be providing satellite targeting information to the Iranians in the Gulf. The UAE Defence Ministry said it had engaged 16 ballistic missiles and 42 drones on Sunday, March 29, the second day of higher levels of Iranian attacks on the country.
But you know, business is business and maybe your enemy’s friend can also be your friend, as Sun Tzu never said. I am not sure the board of DP World has thought this one through, however.
Thirdly, Ukraine has been providing expert support to the Gulf states, including the UAE, at defending themselves from Iranian drones, as Reuters reported, because… you know, Ukraine has quite a lot of experience in this area after Russia fired 57,000 Shahed drones at the country. It seems a little awkward to be asking the Ukrainians for help shooting down drones, only to be giving money to the very country that is firing thousands of the blasted things at it.
Finally, there is the best argument. The only happy foreign investor in Russia is the one who did not make the investment there.
To say that Russia is a graveyard of foreign investment dreams would be an understatement. What with endemic corruption, high level kleptocracy, a complete absence of the rule of law, an autocratic and brutal political system, a complex tax system, and exchange control restrictions, Russia is a horrible place to do business.
Oil giant Shell has discovered this several times, most recently in the US$1.6 billion court case the Russian Government launched against the company in 2025 over cancelled LNG deliveries. But even before that, in 2006, the company was forced to cede control of its Sakhalin II LNG project to Gazprom after a legal campaign by the Russian state of fines, investigations and criminal charges.
Bob Dudley, former CEO of BP, believed he was being poisoned during his stint working in Russia for BP’s joint venture there, and fled the country in 2008 when he heard he was under imminent threat of arrest from the government. This came as part of the Russian Government’s efforts to wrestle control of BP-TNK from its four oligarchical owners and their British corporate partner.
But it is not just big companies; every investor in Russia, big or small, seems to get robbed blind by the government, or its rapacious officials. The American farmer Justus Walker, who used to appear in glowing Russian state television coverage of the agricultural sector and has lived there for ten years farming goats in Altai Krai region, has railed against efforts by the state to “kill us all” with corruption and contradictory policies.
If Sheikh Mohammed, the ruler of Dubai, is in any doubt about why this Fesco joint venture for DP World is a bad idea, he should call Sir Bill Browder. Sir Bill was once the largest foreign investor in Russia; now, he is not exactly the country's biggest fan after his Russian lawyer was murdered for investigating a high-level tax fraud in detention in 2009.
To summarise – DP’s World’s previous boss did a great job for two decades at building the ports operator in a global powerhouse. But then Sultan Ahmed bin Sulayem was fired because of his questionable ethical and moral decisions, and the taint of a close friendship with Jeffrey Epstein.
It looks like his successors running DP World might want to work on staying in their jobs for a while longer by not making questionable business decisions less than two months after taking over from the unfortunate Mr bin Sulayem.
Background Reading
Our summary on the horrible and tragic murder of arguably the bravest whistle-blower of the twenty-first century, Browder’s Russian lawyer, Sergei Magnitsky is here.
The BBC summary of Sergei Magnitsky's investigation into the tax corruption at Hermitage Capital is here, while his Wikipedia biography is here.
