COLUMN | Concept and execution, part one of two: DEME's purchase of Havfram and how it puts pressure on its competitors [Offshore Accounts]

Last week, we made the confident prediction that uncertainty over the oil price would restrict offshore oil and gas support vessel fleet deals.

With oil briefly wobbling below US$60 per barrel in the following few days, as the American flip-flop over tariffs continued, and fears of a recession in the land of the star-spangled banner rose, many of us in the industry probably had depressing flashbacks to the last downturns of 2014 and 2020.

On both occasions, the oil price fell below that fateful US$60 level and a wave of contract cancellations, rate reduction negotiations, redundancies, and bankruptcies followed.

For now, the bullet has been dodged… until the next turn of the screw. After the 90-day pause in the tariffs above 10 per cent for every country except China was announced, and most laptops, games consoles and iPhones were exempted from the so-called reciprocal tariffs, even if made in China, oil once again sits pretty in the mid US$60s.

Away from the hurly burly of the daily market movements, there have been some material developments. I will avoid commenting on the deal at the International Maritime Organisation to impose binding emission targets on the shipping industry to target net zero by 2050, and on the news that Estonia has seized a "dark fleet" tanker flying a fake Djibouti flag whilst en route to Russia.

Instead, over the course of this week, we’ll stick to what we know: offshore and shipbuilding, baby!

DEME expands its WTIV fleet

The biggest deal of 2025 so far is not an oil and gas deal, but a wind deal.

Last week, Belgium’s DEME announced it was paying US$900 million to acquire Havfram, the Norwegian wind turbine installation vessel (WTIV) startup with just fifty employees and two newbuildings partially completed in China.

This price is incredibly good news for Cadeler, which has seven similar WTIVs in service and another four under construction in China and Korea. At the time the Havfram order was placed, we estimated that each ship cost US$330 million, and certainly not more than US$350 million.

The Havfram WTIVs are being built to the GustoMSC NG20000X design at CIMC Raffles in China. They have the capability of installing offshore wind turbines with a rotor diameter of more than 300 metres, as well as XXL monopiles weighing up to 3,000 tonnes each at water depths of up to 70 metres, the company has said.

The jackups will each be fitted with a crane with a lifting capacity of 3,250 tonnes.

What makes them so valuable to DEME is that both vessels are close to delivery now. The company expects to take delivery of the first unit in the fourth quarter of 2025 and the sistership will follow in early 2026, and both units are already contracted as of the second half of 2026.

Havfram has built up an orderbook of approximately €600 million (US$680 million), and this includes support for the construction of some of the world’s largest offshore wind farms from 2026 to 2030.

A private equity flip with pension money too

Havfram was spun out of what had been previously the Ocean Installer offshore construction company in 2022. The wind company was capitalised with a new equity commitment of US$250 million by specialised climate infrastructure investment firm Sandbrook Capital on top of the shareholder's equity from existing owner HitecVision, the Norwegian private equity fund.

As the company announced its newbuilds, an additional tranche in equity funding was provided by Canada's PSP Investments just over two years ago. PSP is Canada's Public Sector Pension fund, investing the savings of the nation's civil servants.

At the time, I was anxious that the poor Canadian librarians were going to see their savings squandered in a bloodbath of excess capacity in the WTIV market in 2026. Happily, for peace of mind in Ottawa, their pension fund has sold with a profit before the vessels even enter service.

This is a great result, especially in a market as volatile as today’s for a company that would need post-delivery finance, and that has a very limited track record in wind. With Cadeler reporting a 4.4 per cent return on assets in 2024 (see page 13 of its annual report), in the most profitable year in its 12-year history, one can see the attraction to PSP and Sandbrook of taking a slug of cash and a big profit today.

Is there a commercial logic for DEME?

It is a great fit for DEME too. DEME is one of the biggest and most serious of the Big Four Lowlands offshore contractors alongside Boskalis, Jan de Nul and Van Oord. Last year, the company generated around US$800 million of free cash flow from operations on over US$4 billion of revenue, so it can afford this purchase of Havfram.

In fact, it is strategically necessary, as DEME’s WTIV fleet of jack-ups has lagged behind those of its rivals.

The company has four smaller jackup in its fleet, and these are now over ten years old with 700- and 800-tonne cranes – suitable for windfarm maintenance, but no longer large enough to install the current generation of 10MW and 12MW turbines.

The company also has two impressive monopile foundation installation vessels, 216-metre long DP3-capable Orion built in 2019 and the 2023-built Green Jade, which was constructed in Taiwan.

However, unlike its rivals Van Oord with Boreas, Seaway 7 with Seaway Ventus and Jan De Nul with Voltaire, DEME has lacked jackup WTIV capacity. Now with the acquisition of Havfram, it can combine turbine installation with foundation installation by Orion and the variety of other services it provides to windfarm owners, such as cablelaying and scour protection/rock dumping.

Havfram is a missing piece of the integrated services puzzle for DEME and the purchase makes strategic sense, even for a premium.

What happens next?

The acquisition is likely to add pressure on Boskalis, now the only one of the Big Four without a jackup WTIV, to make an order or an acquisition in this space.

It also piles the pressure on Cadeler to offer its clients the same project packages, rather than just the charter of a WTIV on a dayrate. This is a move Cadeler had previously said it was embracing, but which is much riskier than a day rate-only contracting basis.

Shipbuilding in this sector shows promise. Later this week, however, we will turn our attention to some not-so-good news from the other side of the Atlantic.