COLUMN | Major news: ICBC disappointment as Bourbon auction flops; Chevron wins in Guyana, sells in Thailand; Eni says no in Namibia; Petronas moves in Suriname [Offshore Accounts]

After last week’s piece on two Shanghai-based “gentlemen” with legal problems, we once again open with another China-focussed story.

At the end of June, we advised that this month would see over a dozen Bourbon offshore support vessels, auctioned on the shipbid.net portal.

The vessels were mostly cold stacked platform supply vessels (PSVs) and 80-ton bollard pull anchor handlers in long term lay-up, plus two subsea vessels mothballed in Abidjan, which are part of a fleet of close to 40 offshore support vessels in the Bourbon fleet, controlled by the Chinese state-owned finance company ICBC Leasing.

In 2019, ICBC notified Bourbon that the Marseille-based company was in default in over US$800 million of lease payments.

eBay for anchor handlers

Bourbon then restructured in 2020 and ICBC took some shares in the company, but never wrote off all its debt. Years of painful negotiations between Bourbon and its Chinese creditor, which we nicknamed the “Inflexible Chinese Banking Corporation,” followed.

When the dispute could not be resolved, the finance house committed to an auction to dispose of the first set of ships.

We had expected there to be two modern, large PSVs included in the package of vessels, Bourbon Rainbow and Bourbon Calm, but in the event only Bourbon Rainbow was placed on the site for sale amid the 13 vessels offered in mid-July. All the vessels were diesel electric, and all were built between 2009 and 2014.

Buyers had to register a 10 per cent deposit ahead of the auction – and if they were the only interested party, they won the ship at the reserve price automatically.

Guess how many of the ships sold?

Pot of gold at the end of the Rainbow

Just one out of 13: only Bourbon Rainbow was sold in the first round of the auction process. The modern, DP2, 2013-built PSV with 928 square metres of clear deck attracted 68 bids on the afternoon of Tuesday, July 22.

The competitive bidding drove the price up from the opening reserve of US$18 million to a closing price of US$23.58 million.

It is not yet known to whom the ship was sold, and we won’t speculate, but it seems fair value for a ship in service in what insiders say is in good condition, with a high-quality specification, which can be chartered immediately. The pricing is supportive of the Tidewater fleet valuations and stock price.

However, the 12 other vessels in the auction attracted no bids, nada, nothing, in a predictable slap in the face for ICBC and its overly optimistic prices for rusty vessels that have sat rotting and crewless for years.

Price cuts, discounts applied

Undeterred, ICBC followed its procedures (Chinese banks always follow their procedures). Almost immediately, the PSV Bourbon Horus was re-offered on the site with a 10 per cent discount, as were the subsea vessels Bourbon Evolution 801 and 803. Again, no bids were made and all three ships failed to sell, a second time.

So now, ICBC is placing all 12 vessels back on the online auction site with reduced prices. Bourbon Horus and Bourbon Evolution 801 and 803 have another 10 per cent slashed off the previous 10 per cent reduction from the initial reserve prices, whilst the nine other ships have 10 per cent off their first opening prices.

If you only read one part of the article, read this table!

The table below contains all you need to know about the next phase of the auction process. Remember, this is the biggest single sale of offshore support vessels since the fleet sales of ENAV to AD Ports, of Astro Offshore to the Adani Group and of Atlantic Offshore to Allianz and its partners in MAG Offshore.

Obviously, all details are given in good faith without guarantee, based on the listings here.

Vessels shaded with the same colours are being sold en bloc. The en bloc reserve price in our table is the total of the individual vessel prices for the vessels marked as being sold together – so, for example, the reserve price for the 80-ton bollard pull anchor handlers Bourbon Liberty 202 and Bourbon Liberty 203 is US$5.4 million, and an interested buyer must bid on both vessels together.

The bids go up in increments of US$20,000 and the auction closes if there are no new bids within five minutes of the preceding bid. If there is a new bid within five minutes of the 30 minutes closing time, the countdown will automatically reset, and the closing is extended by five minutes.

We believe that even at these reduced prices, ICBC will struggle to sell most of these vessels when the auctions are held online between July 30 and August 1.

We reiterate that the ships have been in long-term lay-up, some for nearly a decade, and all are languishing in locations with hot and humid conditions, which encourage corrosion and the degradation of electronics, chips and circuit boards. Desert dust is also an issue for ships stored in the UAE and Ivory Coast.

The cold-stacked vessels will take months, if not years, to reactivate, and millions of dollars of additional spending from the buyers. Nobody can say for now with any certainty how much reactivation will cost, or how long it will take.

ICBC follows Beckett and Wawrinka: failing better and cheaper?

Acquiring these vessels after being in lay-up for so long is risky for the buyers, and we believe that the reserve prices are still too high to sell all 12 ships, even with 10 or 20 per cent off in the latest auction, given the uncertainties of an expensive reactivation process.

My gut feel is that the two subsea vessels need to be priced at US$15 million each to attract interest, and that that the technically obsolete Bourbon Liberty 100 series make sense to buyers only at around US$2.5 million each, over half the current reserve.

The Bourbon Liberty 200 series anchor handlers are more reasonably priced now, as is Horus with its big discount. Shipbid.net also needs to reduce the deposit paid by the buyers to reflect the new, lower reserve prices, not 10 per cent of the original price from two weeks ago. Let’s see what happens.

Grand slam winning tennis player Stan Wawrinka tattooed a quote from the Irish novelist Samuel Beckett onto his forearm: “Ever tried, ever failed, no matter, try again, fail again, fail better.”

The ICBC Leasing management should probably get the same tattoo and add the words "with lower prices" at the end.

Major news from the oil majors (1): Chevron wins in Guyana

Whilst ICBC continues to try to finish the Bourbon fleet sale, the oil price remains sluggish at just under US$70. But the majors have some major news.

Chevron finally won its arbitration against ExxonMobil, which disputed Chevron’s right to acquire Hess’ stake in the company’s most valuable asset. Chevron promptly closed the US$53 billion acquisition of Hess on July 18, winning the most important asset in the portfolio, Hess’s 30 per cent stake in the deepwater Stabroek project in Guyana.

Chevron announced the takeover of Hess in October 2023, but ExxonMobil, which operated the block with a 45 per cent share, and its partner in Stabroek, CNOOC of China with a quarter of the block, tried to block the sale of the Hess’ stake in the block.

ExxonMobil and CNOOC said that under the block’s consortium agreement, they had pre-emptive right of first refusal on the 30 per cent owned by Hess, and that they should split the Hess stake between themselves.

Stabroek is already producing 660,000 barrels of oil per day from three floating production units, with a fourth unit constructed by SBM Offshore, named One Guyana, already in country and undergoing hook up.

One Guyana will operate in the Yellowtail field in 2,000 metres of water, with an initial production capacity of 250,000 barrels per day, and around two million barrels of storage. Once online, it will bring Guyana’s production up to 900,000 barrels per day, and there are another four floating production units expected to be brought online before 2030, which will bring the nation’s production closer to two million barrels a day.

The massive Stabroek petroleum system was discovered by ExxonMobil in 2015, and the concession is estimated to hold more than 11 billion barrels of oil.

The FT reported that analysts reckon that Stabroek will generate US$182 billion in profits from oil and gas sales over the next 15 years, so the Chevron stake in Hess will pay for itself from that asset alone, meaning all the company’s other production and reserves are effectively free.

Major news from the oil majors (2): Chevron sells JDA stake for US$450m

No sooner had Chevron acquired Hess, than it made a disposal of Hess’ 50 per cent shareholding in the Carigali-Hess Operating Company (CHOC) in Block A-18 in the joint development area (JDA) shared between Malaysia and Thailand in the Gulf of Thailand. Thailand’s PTTEP has agreed to US$450 million for the Hess half share in the joint venture, in which Malaysia’s state oil company Petronas Carigali holds the other 50 per cent.

The sale sharpens Chevron’s focus on deepwater, and reinforces PTTEP’s regional reserves, which are fed into Thailand’s national supply.

CHOC currently produces approximately 600 million cubic feet (17 million cubic metres) of gas per day — and the production is split 50/50 between Malaysia and Thailand. Upstream reported that the Thai half share of the block’s production “accounts for six per cent of the country’s domestic gas demand.”

Further shallow-water field disposals are expected by Chevron, including the rumoured sales of block zero in Angola, following on from the sale of the company’s sale of its mature assets in Congo-Brazzaville in last year to Trident Energy.

In 2024, Chevron signed contracts to explore blocks six and 11 offshore Bioko Island in Equatorial Guinea and in February this year it acquired an 80 per cent state in petroleum exploration licence (PEL) 82 in Namibia. In January 2025, Chevron and its partners completed their first deep-water well in PEL 90 offshore Namibia.

Major news from the oil majors (3) – Eni says "no" to Galp in Namibia

Despite Shell declaring its initial discoveries in Namibia to be uncommercial and writing off US$400 million in costs, many in the industry believe that the south-west African nation is the next Guyana with multi-billion barrels in reserves pending appraisal and development.

The country is waiting for two landmark decisions. First of these is the final investment decision (FID) by TotalEnergies to proceed with the 150,000 barrels per day development on the deepwater Venus oil field, which is now expected to be made in 2026 for first oil in 2029.

Secondly, Portuguese energy company Galp is in the process of finding a farm-in partner to buy into its Mopane oil discovery in the Orange Basin off Namibia, which may contain up to ten billion barrels of oil.

Unfortunately, the size of the investment required to bring the field to production means that Galp prefers to sell half its shareholding and the development cannot proceed until that partner farms in. Speculation has sizzled on who the buyer might be. Petrobras and TotalEnergies have both been discussed as potential candidates.

One company that it won’t be is Eni. The Italian state-owned energy company explicitly stated last week that it would not be bidding for the Mopane stake. Announcing Eni’s US$1.33 billion second quarter net income, the company's senior executives in Milan said that they were not interested in buying a stake in Galp’s Namibian block.

Instead, Eni said that it would maintain its focus via its Angolan joint venture with BP, Azule Energy, which holds a stake in PEL 85, where Rhino Resources recently made a discovery with its Capricornus-1X exploration well. That well’s test showed a flow of 11,000 barrels per day of light oil, with limited associated gas. Rhino and Azule each hold 42.5 per cent interests in PEL 85, and Azule has the right to take over operatorship for the development phase.

In an interview with S&P Global, Rhino CEO Travis Smithard said he hoped the company would be producing first oil in Namibia in 2030.

Major news from the oil majors (4) – Petronas Carigali in Suriname

Another country hoping to be the next Guyana is neighbouring Suriname. TotalEnergies has already taken the FID on its deepwater GranMorgu oil production project which should be producing around 200,000 barrels per day from 2028 onwards.

Next in the pipeline is Malaysian state-oil company Petronas Carigali. Petronas has promising midwater gas developments in block 52 offshore Suriname and is rumoured to be considering a floating LNG platform (FLNG) to position at the Sloanea discovery in 450 metres of water, 120 kilometres offshore. The company is currently drilling a three well programme there with the semi-sub Noble Developer.

Petronas already operates two offshore FLNGs off Malaysia and has a third inshore unit to be moored alongside an industrial park off Sabah state already under construction.

Like Eni, which has a second FLNG on track for delivery for the Coral Norte project in Mozambique to complement its existing Coral Sul FLNG, Petronas has demonstrated the benefits of duplicating FLNG design. Therefore, sources in Paramaribo are hopeful that if the reserves can be proved up, the Malaysian company can move quickly to install a new FLNG unit before the end of the decade.

Jennifer Geerlings-Simons made history earlier this month when she was sworn in as Suriname’s first female President. Now, she is hoping that Petronas and TotalEnergies can deliver prosperity to the small Dutch-speaking country of around 650,000 people.

Major projects by the majors can have major consequences for small countries.

Background reading – more UAE shenanigans

The Organised Crime and Corruption Reporting Project (OCCRP) has a not very surprising story that a (surprise!) British Virgin Islands company called Virginia Invest and Finance and owned by the alleged mastermind behind (surprise!) massive tax fraud in Russia poured over US$15 million into a villa and four luxury apartments in the Kempinski Hotel and Residences properties on the (surprise!) Palm Jumeirah in Dubai. OCCRP’s reporting on the heroic life and tragic death of Russian whistleblower Sergei Magnitsky is worth your time.

OCCRP has previously covered how Olga Stepanova, a former official at the Moscow tax office, which approved the corrupt tax refund that Mr Magniksky exposed, acquired “a brand new avant-garde mansion in the Moscow suburbs with a US$12 million price tag. She and her husband had already purchased vacation homes in Dubai and Montenegro with Swiss bank accounts, through a chain of shell companies.”

Those who plundered the state escaped untouched, whilst the innocent and dogged lawyer who exposed their scheme was imprisoned on false charges, beaten and left to die of pancreatitis after being denied medical treatment in prison in November 2009 at the age of just 37.

One company that does face sanction at last is Intershipping Services, the UAE company that operates the private and for-profit Gabonese and Comoros shipping registries, which have been widely used by the Russian "dark fleet" of tankers involved in smuggling sanctioned oil, a story we first covered eleven months ago.

Ten days ago, both the European Union and the United Kingdom finally sanctioned the UAE-based company. The EU identified that Intershipping Services also operates the Comoros registry, acting through its owner's family relationships and a subsidiary office located in Mumbai, India, a link of which we were not aware.

Both Gabon and Comoros have appalling safety records as flag states, and ships flying their flags commonly feature in port state detentions and in crew-abandonment cases. The Gabonese-flagged tankers Narsimhaa and Pablo suffered explosions in recent years where three crew on each ship died, highlighting the dangers of the Dark Fleet.

Whether the UAE will act against those profiting from substandard shipping from offices in its territory is not clear. If the evidence of the Magnitsky affair is anything to go by, or the continued residence of the daughter of the former and extremely corrupt Angolan president at the Bulgari Residences is anything to go by, probably not.

Those who operate substandard shipping registries for profit should be compelled to face the consequences of their actions, which jeopardise the safety of seafarers and risk potential oil spills and environmental damage. Here's hoping Intershipping is not the last such private registry to face scrutiny.