COLUMN | Wait and hope: BP in Brazil; TotalEnergies in South Africa; North Star and RWE; ICBC auctioning again [Offshore Accounts]

“The sum of all human wisdom will be contained in these two words: wait and hope.”

So wrote Alexandre Dumas in The Count of Monte Cristo, his tale of the long imprisonment and finely crafted revenge of Edmond Dantès, a young seafarer falsely accused of treason in nineteenth century France.

Wait and hope remains good advice for a range of players in the offshore sector.

BP's big Bumerangue prize in Brazil

One group that have endured disappointment after disappointment are the shareholders in BP, as the company has embarked on strategic flip-flop after strategic flip-flop, pivoting to renewables and then pivoting back to oil and gas, sacking its “randy” former chief executive for inappropriate relationships with several colleagues, and being the subject of unwelcome takeover rumours from Shell.

Since the dark days of Covid five years ago, BP’s shares are up 43 per cent, whereas Shell’s stock is up over 120 per cent in the same period, and Shell is now worth more than twice as much as BP.

But last week, BP announced its largest exploration discovery in 25 years with a successful well in the Bumerangue block, located in the Santos Basin offshore Brazil, 404km from Rio de Janeiro. Valaris Renaissance drilled the well in a water depth of 2,372 metres, penetrating an estimated 500-metre gross hydrocarbon column in high-quality pre-salt carbonate reservoir, with an areal extent of greater than 300 square kilometres.

BP holds 100 per cent ownership of the Bumerangue oil field, after being the sole bidder in a 2022 auction.

Bumerangue is BP’s tenth discovery in 2025 to date. The company has already announced oil and gas exploration discoveries at Beryl and Frangipani in Trinidad, Fayoum 5 and El King in Egypt, Far South in the US Gulf of Mexico, Hasheem in Libya and Alto de Cabo Frio Central in Brazil, plus discoveries in Namibia and Angola through Azule Energy, its 50-50 joint venture with Eni. Finally, the company is achieving success in what should be its core business, finding and producing oil and gas!

In its latest strategic iteration, BP now plans to grow its global upstream production to between 2.3 million and 2.5 million barrels of oil equivalent a day in 2030, having previously said it would reduce production to comply with "net zero" planning when oil prices crashed in 2020. Instead, BP now plans to develop the capacity to increase production out as far as 2035.

Brazil is a long, hard administrative slog, and new fields typically take five to seven years to bring to production anyway. One potential fly in the ointment is that BP noted the high CO₂ content at Bumerangue, which will increase the cost of production and likely require expensive reinjection and higher specification production equipment.

BP to step on the gas in Senegal with GTA Phase II?

Meanwhile, Upstream has been covering the possibility that BP will finally progress the second phase of its deepwater Greater Tortue Ahmeyim (GTA) floating LNG (FLNG) project that straddles the maritime border of Senegal and Mauritania, and is shared between the two states.

The CEO of FLNG contractor Golar, Karl Fredrik Staubo, has indicated that this may include replacing the current liquefaction vessel with one double its size, capable of producing over five million tons of LNG a year. He reckons it would take four years to build the new FLNG in Korea.

LNG from the long delayed first phase of the GTA development was finally exported in June this year. The gas is compressed on Golar’s Gimi FLNG vessel after initial processing from an offshore production unit, the imaginatively named GTA FPSO, 120km away.

Gimi is moored in shallow water behind a 1.25-kilometre long concrete breakwater fabricated by French contractor Eiffage, around 10 kilometres offshore from the Senegalese fishing port of Saint Louis. The FLNG vessel has capacity to produce 2.7 million tons per year. GTA is one of the deepest offshore developments in Africa, with the gas reservoirs located in water depths of up to 2,850 metres.

The field is supported by two platform supply vessels (PSVs) working out of Nouakchott port in Mauritania under the ownership and management of Singapore’s Blue Ridge, and a crewboat from the UAE’s Stanford Marine.

Let’s wait and hope to see when BP can achieve first oil from Bumerangue, and first gas from the second phase of the GTA project in Senegal and Mauritania.

TotalEnergies offshore South Africa

One of the great mysteries of the modern age is how environmentalists in South Africa are so opposed to oil and gas, but quite happy to do nothing about the country’s dependence on dirty, coal-fired power stations. Coal production in South Africa in 2024 stood at over 232 million tons and 88 per cent of the country’s electricity is generated from coal.

Last week, the High Court set aside the South African Government’s approval of TotalEnergies South Africa’s environmental authorisation to drill for oil and gas in offshore Block 5/6/7 off the Cape of Good Hope.

The court has sent the matter back to the Department of Minerals and Petroleum to make a fresh decision, following further studies, the addition of further information, and yet more public participation… because, you know, the South African public are well known for evaluating complex issues sensibly especially in a country where 80 per cent of children struggle to read by the age of ten and there is a literacy and poverty crisis presided over by the completely corrupt African National Congress.

A victory for scaremongering, Saudi Arabia and coal miners

This ruling against TotalEnergies is the result of a challenge brought by the Green Connection and Natural Justice, which argued that the approvals were given without properly considering the risks to the environment, people’s livelihoods, and South Africa’s climate commitments, as per the triumphant activist press release.

The environmental campaigners described the court ruling as, “a major victory for small-scale fishers and coastal communities.”

This is nonsense. The ruling is a victory for the coal lobby, the coal unions, and the OPEC producers that ship oil to an impoverished African country that likely has the potential to meet its own energy needs from its own offshore areas, if only exploration was permitted.

The idea that a country almost completely dependent on foreign oil and gas that generates 88 per cent of its power from the dirtiest hydrocarbon known to humanity should not explore and develop its offshore oil and gas reserves because of climate concerns is a joke. The South African courts had previously blocked Shell from carrying out new seismic surveys in a nearby exploration block off the country's south coast, again at the behest of the environmental charities.

TotalEnergies had already announced its exit from participation in Block 5/6/7 in July 2024, Shell to take over the operatorship. However, TotalEnergies E&P South Africa said it, "remained fully committed to respecting the judicial process to its term and to engaging continuously with all its stakeholders."

Juice the Orange Basin

Critically, however, the French company (and Shell) both have plans to drill in deepwater blocks in the southern Orange Basin in 2026, just south of where TotalEnergies made the one-billion-barrel Venus discovery in the Namibian sector of the same geological basin. Let’s hope the courts don’t block that exploration programme.

Don’t get me wrong. Nobody wants another Deepwater Horizon type environmental disaster.

The Deepwater Horizon catastrophe was caused by bad well management practices on the rig and a defective blow-out preventer, but that was fifteen years ago. The industry has learned the lessons of that catastrophe, especially since all the oil companies can see how the incident cost BP US$70 billion (with a “b”), the single largest corporate loss in history after the blow-out and oil spill in the US Gulf of Mexico.

Nothing focuses corporate minds like the risk of a multi-billion dollar claim.

The industry has learnt and improved its drilling procedures, with double BOPs on seventh-generation rigs, and improved well control measures. By no reckoning is coal cleaner than oil and gas, and maintaining South Africa’s dependence on coal and on imported oil by blocking domestic oil and gas exploration amounts to climate hypocrisy of the highest order.

At a time when TotalEnergies in Namibia is looking at bringing the Venus oil field offshore Namibia into production at the end of this decade, with production estimated at 200,000 barrels per day, blocking South African exploration amounts to self-sabotage by the sanctimonious.

If they really cared, the green activists would be suing Eskom to shut down all its coal-fired power stations and replace them with a combination of LNG and renewables. 

Let’s wait and hope, but the judicial precedents coming out of South Africa are not positive.

North Star wins wind quartet, orders more ships

One thing we are waiting and expecting, if not hoping for, is an imminent oversupply of commissioning service operation vessels (CSOVs) to support windfarm operations.

The orderbook makes no sense. Last week, UK-based, private equity-owned North Star announced what it described on social media as the, "biggest deal in North Star history!" This involved agreements to support utility company RWE’s growing offshore wind farm portfolio with four hybrid-powered CSOVs.

The deal comprises two firm long-term charter agreements and two reservation agreements for newbuild vessels, together representing the first and largest commitment in the sector to date, and the biggest in North Star’s history.

North Star first signed a three-ship agreement in 2021 for the Dogger Bank wind farm, and it now has four SOVs working there (without the “C”, being smaller SOVs). RWE currently operates 19 offshore wind farms (RWE’s share amounts to 3.3 GW) and has four offshore wind projects under construction in UK, Denmark, Germany and the Netherlands (RWE’s share amounts to 3.1 GW).

The new charter involves two North Star CSOVs supporting RWE’s North Sea operations and maintenance schedule. Grampian Kestrel (see Baird Maritime's vessel review of Grampian Kestrel here) and Grampian Eagle were delivered into operations this year.

Grampian Eagle will support operations at the Triton Knoll wind farm off the British coast for a minimum of 12 years. Grampian Kestrel will be servicing RWE’s German wind farms north of Heligoland for a minimum of 10 years. For Germany, the charter contract starts this winter and for the UK in summer 2026. Both contracts include options for further extensions of up to three years in the charterer’s favour.

To ensure seamless delivery until the North Star CSOVs are available, two interim Windward Offshore ships will be chartered in. Windward Athens will commence service in winter 2025 within RWE’s German offshore wind farms, located north of the island of Helgoland, while Windward Paris is scheduled to begin operations in summer 2026 at the Triton Knoll wind farm off the British coast, Windward confirmed.

Built at Vard’s shipyards in Romania and Norway, the Windward vessels feature battery hybrid systems and are fitted with Ampelmann W-type walk-to-work gangways, seven-ton, 3D motion-compensated cranes, and accommodation for up to 120 personnel.

Additionally, RWE and North Star have signed a reservation agreement for two newbuild SOVs, which will also be constructed by Vard for delivery in 2028 and 2029 respectively (our coverage here). Each 87.5-metre vessel will include a motion-compensated gangway with elevator, a boat landing system, and accommodation for up to 120 personnel as well as hybrid battery systems and methanol-ready engines.

I have to ask why North Star is adding yet more tonnage to an already bloated orderbook that will see dozens of uncontracted SOVs and CSOVs enter service in the coming years. With the inflation outlook unclear, I hope that the company has secured a mechanism to manage potential increases in operating costs over the next decade.

Dong Fang does it again

Also signing up for the long term is Dong Fang Offshore in Taiwan, which announced a 15-year contract with Synera Renewable Energy (SRE) to provide an SOV for the Formosa IV offshore wind project. Dong Fang will register the vessel under the Taiwan flag.

Again, in a world where the US is running a huge budget deficit, printing dollars like they are going out of fashion, and where the Taiwan dollar has been one of the world’s most volatile currencies, you have to admire the company’s confidence in being able to manage future changes in costs over such a long-term period.

Dong Fang already has a wind turbine installation jackup, three SOVs, and a subsea construction vessel on order. It recently fixed a contract with the Norwegian ocean services provider DeepOcean for the charter of its subsea vessel Orient Adventurer, with the firm period commencing in early 2026 and ending at the end of 2027, plus up to four years of extensions.

Last year, Dong Fang was awarded a charter for another newbuild Taiwan-flagged CSOV by Copenhagen Infrastructure Partners for the Fengmiao I wind farm project offshore Taiwan. The CSOV has already been ordered and will be delivered in the first quarter of 2027, as we reported.

Wait and hope to see what cumulative inflation has been in 2035, and wait and hope to see how North Star and Dong Fang have managed to hedge their exposure.

ICBC: Two more Bourbon anchor handlers sold

The efforts by the Industrial and Commercial Bank of China (ICBC) to sell the forty or so vessels that it owns under leases that French marine player Bourbon has defaulted upon have finally drawn two more wins.

Last week, the anchor handlers Bourbon Liberty 202 and 203, which have been cold stacked in Ras Al Khaimah in the UAE for over eight years each, finally sold to a single bidder at their reserve price of US$4.86 million together, en bloc. This means that over the course of six weeks and several price reductions, ICBC has now managed to sell five ships from the thirteen originally offered.

The remaining unsold vessels from the first tranche are being re-offered this week on the shipbid.net platform between August 19 and August 22, with the PSV Bourbon Horus being offered at a new lower price of US$4.9 million, along with some old, laid-up favourites from the Bourbon Liberty 100 series and the Bourbon Evolution 800 subsea class. This is the fifth week ICBC has gone to auction.

The current state of play of the auctioned fleet is as follows:

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

As before, 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.

Wait and hope, and further reduce the prices. Once again, Alexandre Dumas offers a profound truth to ICBC.

Background reading

Whilst Saudi Arabia attempts to burnish its reputation by hosting the completely transparently awarded 2034 FIFA World Cup, Human Rights Watch has warned that the Saudi Government is increasingly using capital punishment to silence dissent. The organisation pointed to recent cases such as the execution of the blogger and journalist Turki al-Jasser, who was arrested in 2018 for (surprise!) exposing corruption within the royal family.

From January through to August of this year, OCCRP highlighted that 241 people were executed in the kingdom, including 162 convicted of non-lethal, drug-related offenses. More information from this report is provided by the rights group Reprieve. Whilst you were busy relaxing on your summer holiday, the kingdom executed 22 people in the first week of August alone, the fastest pace since March 2022, when 81 people were executed in a single day.

Turki Al-Jasser was the first journalist executed in Saudi Arabia since the 2018 killing of Jamal Khashoggi in Turkey. We suspect he won’t be the last.

With the news that Aurora Offshore has lost its management contract for Evangelos Marinakis’ Capital Offshore fleet of PSVs, including ten newbuild, DP2, 1,000-square-metre clear deck PSVs under construction at Fujian Mawei Shipyard, and an in-service fleet of seven existing PSVs to United Offshore Support (UOS) in Germany, Tribuna.com has the background for the due diligence UOS should be doing on this heavyweight Greek shipowner and football club proprietor.

It features this great line: “Let’s not speculate on how exactly the evidence [in a massive drugs case featuring three tons of heroine on a ship] went missing — instead, here’s a headline from a Greek satirical blog from that time: 'Witnesses commit suicide to accuse an innocent shipowner.'"

Enough said!