Tuesday, January 5, 2010

Rising crude oil gives boost to offshore service providers

Drilling and offshore service providers, such as Great Ship and Dolphin Offshore, expect a revival in demand for services as the price of crude oil has stabilised in the range of $70 to $80 per barrel.

Explorations at high costs became unviable when Brent, the benchmark crude oil price, crumbled from a high of over $145 per barrel in July 2008 to just $34 per barrel in December 2008 due to the economic slowdown.

Many oil producers shelved their plans for exploration as the economic downturn coincided with the drop in oil prices. This led to the global supply of assets like rigs and platform supply vessels (PSVs) exceeding the demand for them.

According to industry analysts, the average charter rates for jack-up rigs of 300-foot water depth has dropped to $136,000 (over Rs 63 lakh) a day from a high of over $200,000 (over Rs 93 lakh) a day in mid-2008. The charter rate for PSVs of over 2,000 dead weight tonne has dropped to $5,600 (over Rs 2.61 lakh) a day now from $42,000 (nearly Rs 20 lakh) a day a year ago.

In addition, West Asia is expected to see an investment of $16 billion (nearly Rs 75,000 crore) for the development of oil fields by such countries as Iran, Qatar and Abu Dhabi.

“With oil steady at over $70 (over Rs 3,200) a barrel and with the credit crisis easing out, demand would be back to an extent,” Great Ship Managing Director Ravi K Sheth said. Great Ship is a subsidiary of India’s largest private shipping company Great Eastern Shipping.

“Demand usually has a six-month lag. So, the real impact would be seen if oil prices sustain at these levels till then,” he added. Great Ship is currently operating two rigs and has chartered out 14 vessels, with 14 more vessels on order for supply.

“Globally, the utilisation level for rigs would pick up in 2010 and this would eventually help get better rates for these assets,” said Ramesh Singhal, chief executive officer of Navi Mumbai-based i-Maritime shipping consultancy. The global utilisation levels for rigs have dropped to 80 per cent from 87 per cent a year ago. In India, there are 47 rigs deployed by Indian as well as international service providers currently.

Apart from rigs, the demand for other offshore services is also expected to pick up.

“We expect restoration of offshore works overseas,” said Satpal Singh, managing director and chief executive officer of Dolphin Offshore, which executes offshore projects on a turnkey basis. It provides all three dimensions of marine constructions, including diving services, marine operations and topside fabrication service for making platforms.

Due to the downturn, some of the recent contracts with Indian oil producers were executing at rates 15-20 per cent lower than the normal budget. India’s two largest rig and offshore service providers Aban Offshore and Great Offshore were not available for comment.

source: www.business-standard.com

Sunday, January 3, 2010

First turbine erected at Thanet offshore wind farm

European energy company Vattenfall has erected the first of 100 Vestas V90 turbines at the 300MW Thanet offshore wind farm off the Kent coast.

Vattenfall finished the erection of the turbine last Wednesday (December 9) at dawn.

The Thanet Offshore Wind Farm, located 12 kilometres off Foreness Point on the Kent coast, has been under construction since 2008 and all 100 wind turbines are due to start generating electricity in the second half of 2010.

Offshore works began in April 2009, with the Sea Jack offshore construction vessel putting in the monopile foundations for each of the wind turbines planned for the site (see this NewEnergyFocus.com story).

David Hodkinson, head of development at Vattenfall Wind Power in the UK, said: "The erection of the first wind turbine at Thanet is a fantastic achievement and we now look to make good progress towards completing the project in 2010.

"We really appreciate the continued high levels of public support from people and businesses in Kent and we would like to acknowledge the incredible efforts our suppliers, including turbine supplier Vestas, have put in to help us reach this important milestone."

Capacity
On completion, the wind farm will comprise of 100 Vestas V90 wind turbines and have a total capacity of 300MW. Vattenfall claims that this is sufficient to supply approximately the equivalent of 240,000 homes per year with clean energy.

Last month, the European Investment Bank (EIB) announced that Thanet was one of six wind farms under consideration for a share of £300 million funding to help connect it to the mainland via a series of high voltage cables (see this NewEnergyFocus.com story).

The wind farm will be located in water depths of 20-25m and cover an area of 35km2. Each turbine will be up to 115m tall at its highest point, with a minimum clearance above sea level of 22m. The distance between turbines is set to be approximately 500m along rows and 800m between rows.

source: newenergyfocus.co