![COLUMN | The end of the world? Borr and Vantage clients sanctioned; more Bourbon boats on the block; Tidewater downgraded; ASL silent [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2F2025-10-27%2F2d754sbc%2FUntitled.jpeg?w=480&auto=format%2Ccompress&fit=max)
The last time we mentioned singer Miley Cyrus in this column was in February 2023 when we warned that offshore wind faced a cost crisis, and tied in her song “Flowers.”
Surprise! This was also the column where we suggested that Equinor might buy Ørsted, 20 months before the Norwegian oil company took a 10 per cent stake in the wind player.
Since we wrote that piece, shares in Danish wind producer Vestas have fallen 30 per cent and the company faces stronger competition from Chinese manufacturers, whilst the American offshore wind market has been hammered by President Trump’s personal animosity against the sector.
No wonder Maersk is taking Seatrium to arbitration over its cancellation of a 99 per cent complete new building wind turbine installation vessel at the Singapore shipyard, a cancellation that Seatrium has rejected.
Let’s pretend it’s not the end of the world, which is the chorus from the first single from Miley Cyrus’ 2025 album. The perfect segue for Seatrium and Maersk, as the opening lyric to “The End of the World”, is, “today you woke up and you told me you wanted to cry,” which must surely be applicable to both Maersk and Seatrium in this dismal case.
But who else in offshore should be pretending it’s not the end of the world, despite waking up in tears?
On October 15, we reported how Britain had targeted Russia's two largest oil companies, Lukoil and Rosneft, along with 51 "dark fleet" tankers under sanctions laws. Russia’s two biggest oil companies are subject to an asset freeze, director disqualification, transport restrictions, and a ban on UK trust services.
One might ask why it has taken the British Government over three years since the Russian attack on Ukraine to place these state-owned oil giants under restrictions, but let’s not go there. About time, too.
Last week, to widespread surprise, America also followed suit and also imposed sanctions on both Rosneft and Lukoil. This caused oil prices to rise to US$65 per barrel despite OPEC announcing it is increasing its output, as the sanctions on Russia could reduce global oil supplies since Russia was the world’s second-biggest crude producer in 2024 after the US, as per Reuters.
Half of Russian oil production comes from the two sanctioned companies. Rosneft alone accounts for 17 per cent of Russia’s budget revenues as per the Financial Times. More sanctions and tighter sanctions on Russia, along with Ukrainian strikes on Russian oil and gas facilities, are just what the international offshore industry needs to support itself through the current soft patch in demand.
The new sanctions are a win for Ukraine, a loss for Russia, and particularly hard on the Russian oil producers, just as the EU reduction of gas purchases from Gazprom has reduced profits at that gas giant.
I don’t think these new sanctions will be completely effective, and that suddenly India and China will stop buying Russian oil. However, I do think that the measures will be effective in reducing demand for Russian oil and increasing the discount at which Russia is forced to sell its crude, impeding its ability to fund its attacks on Ukraine.
The sanctions also had immediate effects on two western drillers.
Borr Drilling announced on Friday that it had terminated two drilling contracts in Mexico following the implementation of international sanctions affecting an unnamed counterparty. The terminated contracts involve Borr’s jackups Odin and Hild, which had firm commitments until November 2025 and March 2026, respectively, according to the company’s press release.
Whilst the Nasdaq-listed drilling contractor did not disclose details about which counterparty in Mexico was involved, some quick sleuthing by the wonderful Amanda Battersby at Upstream revealed that it was Fieldwood Energy. She reported that Lukoil had acquired many of Fieldwood’s Mexican upstream assets in 2022, and commented that, “today, Fieldwood E&P Mexico is a de facto subsidiary of Lukoil.”
With Borr’s other Mexican client, state oil company Pemex, still struggling to pay its invoices and labouring under around US$100 billion of debt, the sanctions on Lukoil mark a blow for Borr and other rig owners in Mexico.
Last week, Paratus Energy Services, which owns five former Seadrill jackup rigs in the Mexico through its subsidiary Fontis Holdings, four of which are currently chartered by Pemex, announced that it had received week US$58 million in payment from Pemex.
That was the good news. The bad news is that on June 30, Paratus’ balance sheet showed it had US$232 million of unpaid invoices in Mexico, so there is still a lot of unpaid debt out there.
We can expect to see Borr, in particular, seeking to relocate rigs out of Mexico, just as it did when it had to navigate Saudi Aramco’s decision to suspend over two dozen jackup contracts in 2024, including several of its own rigs.
Borr has a fleet of 24 jackups, so it is diversified enough to be able to take the hit from having to cancel its Fieldwood contracts. Let’s not pretend it’s the end of the world.
The same can’t be said for the second rig owner that had to cancel a charter due to sanctions. When you operate only one wholly-owned drillship, losing its charter is a much bigger problem.
That’s the challenge for Vantage, a company that sold the majority stake in its penultimate drillship Tungsten Explorer to TotalEnergies earlier this year, leaving Vantage with only sister sixth generation drillship Platinum Explorer under its full ownership. The rig had been out of work for over a year before Vantage announced a new contract win in April, starting shortly in October, and worth around US$80 million.
On October 19, Vantage put out a press release announcing the immediate termination of the contract for Platinum Explorer for its approximately 260-day campaign.
"The termination is due to changes in economic sanctions applicable to the campaign, rendering the contract execution unlawful and therefore subject to termination," said Vantage.
Ouch. The Vantage vision is “a perfect day every day,” as per the company website, so we must presume that the change in sanctions rather spoiled that day. The details of the client involved have not been released.
Where is Amanda Battersby when you need her?
The good news is that Vantage paid off its final US$64 million of long-term debt last month, so is effectively debt-free. This makes it an ideal candidate for consolidation by one of the bigger players, which could buy the firm, fire the shore staff and market Platinum Explorer to clients not on the Washington and London naughty lists.
The company has continued to bleed money following its failure to charter the rig, losing US$16 million in the second quarter and US$19 million in the first quarter of this year as the drillship sat offhire. The book value for Platinum Explorer seems to be around US$200 million, so I would not rule out some form of merger or acquisition to reduce overheads and stem the losses.
I would also highlight that the cancellation of Vantage’s drilling contract may be an opportunity for China’s Bluewhale Offshore, one of the few owners of deepwater rigs shielded from UK and American sanctions by virtue of its Chinese state ownership (see here).
Bluewhale recently announced it had won an accommodation and heavy lift contract for the semisub floatel Blue Gretha for Shell’s deepwater Bonga North project in Nigeria.
The release said that the service contract includes a firm period of 15 months plus optional periods.
Blue Gretha was formerly known as Huadian Zhongji 01 and is being refurbished and prepared at Bluewhale’s parent company CIMC Raffles’ shipyard in Yantai, China. The semisub has previously worked in Brazil for Petrobras and in China's offshore wind industry.
The DP3 Blue Gretha is 81 meters in length, has two 1,800-tonne Huisman cranes, and can accommodate 618 personnel on board (see full specifications).
As we have seen with the impact of western sanctions on Russian on the Chinese and Indian refining sector, however, Bluewhale may have to pick a side in the Ukraine conflict and either abandon clients in sanctioned states, or wholeheartedly commit to working only in the international oil and gas sphere.
Either way, let’s not pretend it’s the end of the world now.
The one story that never seems to have an end is the long saga of the auction of the large chunk of the Bourbon fleet owned by Chinese lender ICBC.
Last week saw the derelict subsea vessel Bourbon Evolution 801, cold stacked for four years in Abidjan, finally sold for US$14.1 million in the online auction. In September, we had commented that the vessel, “needs to be priced around $15 million to sell,” so we do feel somewhat vindicated on our market valuations.
The laid-up 80-ton anchor handler Bourbon Liberty 206 meanwhile sold for US$2.53 million, leaving only the in-service DP2, 80-ton bollard pull anchor handler Bourbon Gomen (built in 2012, formerly Bourbon Liberty 302), subject to auction on November 21.
So, no sooner are the first 17 vessels sold, than the online auction site makes a pre-announcement of a further sale of nine in service, in class, fully operational vessels.
This is where the process starts to get interesting, as this is a direct attack on Bourbon’s core business. We understood that Bourbon was previously the successful bidder for the in-service platform supply vessel (PSV) Bourbon Calm last month, so maybe the company will have to deploy more firepower to buy back these ships from its lender.
The nine vessels included in the pre-bid announcement are seven 80-ton bollard pull anchor handlers of the Bourbon Liberty 200 and 300 series, the small 1,700DWT PSV Bourbon Liberty 160 (built in 2013 and currently working off Angola) and the jewel in the crown, the DP2 construction vessel Bourbon Evolution 807 (built in 2014 and currently working off Congo).
You can track when the ships are finally auctioned here.
One of the recurrent themes of my column is the unerring ability of Tidewater’s senior management to enrich themselves, even as the company’s shareholders suffer and the company’s share buyback scheme seems badly timed.
So, it was no surprise to learn that Tidewater’s Executive Vice President Daniel Hudson sold 10,000 shares of the company’s stock on August 5, obtaining an average price of US$57.56, and netting him proceeds of US$575,600. After the sale, Marketbeat reported that he still owned 75,986 shares in Tidewater.
Since the sale, the shares have fallen 14 per cent to close at US$49.31 on Friday. That followed a downgrade in its shares by Norwegian bank Dnb Nor Markets from a "strong-buy" rating to a "hold" rating, as researchers cited a “challenging environment” for the company that the analysts expect to last into 2026.
This downgrade followed analysts at Zacks Research also cutting their rating on Tidewater shares from a "strong-buy" rating to a "hold" rating on October 6.
Tidewater's Q3 2025 earnings are scheduled for release on Thursday, November 6, with a conference call for investors and analysts scheduled the next day. Let’s see whether DnB was right to be pessimistic, and whether Mr Hudson should perhaps have held on to his shares or not.
When we covered on the second devastating fatal accident at ASL’s Batam shipyard on October 15, where the Indonesian press has reported that the death toll has risen to 13, we assumed that the company had simply not issued a statement because of the Deepawali holidays in Singapore.
Ten days on, ASL still has not released a statement to the Singapore Stock Exchange, even though 13 people are now believed dead and there have been large demonstrations against the company in Batam calling for the authorities there to punish the company for the deaths by enforcing safety laws.
We urged the company’s independent directors to press the management for change. We had consulted ASL’s official investor relations website as to their identity. We pressed Andre Yeap Poh Leong and Damian Hong Chin Fock to speak up, given the large number of fatalities.
But wait…
It also speaks volumes for the corporate governance and investor relations communications at ASL Marine that actually Mr Adrian Wong Soon Peng had been appointed to the board as Non-Executive and Independent Director in replacement of Mr Andre Yeap Poh Leong in December last year, but the ASL IR website has still not been updated.
We knew ASL was a mess, but having the wrong directors on the website is a new low. Apologies to the two former independent directors. I hope they share our outrage at the failure of their former company to protect the lives of its staff and subcontractors.
However, like Mr Yeap, who dodged the bullet over the two explosions in Batam by his resignation, Mr Adrian Wong Soon Peng is also a partner at the same leading Singaporean shipping law firm, Rajah and Tann.
Therefore, our comment that it is unfortunate that such a distinguished law firm should have one of its leaders serving on the board of a company where so many people have been killed in two serious accidents at its shipyard in Indonesia in just four months still stands. Is this the kind of image any major law firm wants to be associated with? It certainly doesn’t look great.
The 2025 annual report also confirms that Damian Hong Chin Fock has also left the board and the second independent director is actually David Hwang Soo Chin. Quite why the ASL Marine investor relations section has not been updated is not clear, as the new directors have been corrected elsewhere, in the “about” section of the website.
If a company’s official website for investors cannot even list the correct directors, then we should not perhaps be surprised that there is disarray in its unsafe shipyard.
"Work accidents are not fate, but the result of negligence," one of the labour representatives was reported as saying at the demonstration last week. "The government must not be silent to see the lives of workers floating because of an unsafe work system."
We agree. Let’s hope that the independent directors can do their duties and drive through changes to prevent any further fatalities at ASL’s deadly facility. Over to you, Adrian Wong Soon Peng and David Hwang Soo Chin.
Issue out a decent press release explaining what the board is doing to compensate families, how exactly ASL is complying with local law, and how this fatal accident in Batam will never happen a third time.
And please, fix the website, too.
