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Trinidad is all in on deepwater exploration; sweet deal for Exxon

August 15, 2025 by offshoreenergy

Trinidad’s Prime Minister Kamla Persad Bissesar: “Trinidad will not wait for the end of any energy era,” she said. “Our principle is simple: investment goes where it is welcomed and stays where it is well treated.”

The PM of a country with an oil production history that predates the Drake well in Pennsylvania leaves no doubt about her support for deepwater development. Her candid and clear messaging is most refreshing.

Consistent with her policy guidance, T&T signed a Production Sharing Contract with Exxon for a massive deepwater tract (Block Trinidad and Tobago Ultra Deep 1, map below). Per Ms. Persad Bissessar:

“Today’s signing underscores our government’s commitment to strengthening national energy security and to unlocking the full value of our hydrocarbon resources through discipline, policy, competitive terms and trusted partnerships.”

The contract is an impressive achievement for Exxon, which was awarded the block non-competively through direct negotiation rather than bid rounds. The spectacular deepwater results offshore Guyana were a major selling point for Exxon, which promoted its leadership in understanding Caribbean offshore geology.

Although another Guyana is unlikely, the enormous lease block presents a great opportunity for Exxon. The consolidated block spans 7,765 square kilometers in the Eastern Tobago Basin in water depths exceeding 2,000 meters. By comparison, Trinidad and Tobago’s total surface area is about 5,128 square kilometers and a typical Gulf of America lease block is only 23 sq km. (Think about that! The size of US offshore lease blocks, which are the world’s smallest, needs to be reconsidered.)

Based on press reports, Exxon will carry out seismic acquisition within 12 months, followed by geological and geophysical studies, and drill up to 2 exploratory wells during the initial phases of the contract. (Reports differ as to whether one of those wells is mandatory, but presumably that won’t be an issue.)

Does this impressive deal reduce the likelihood that America’s largest oil company, which has essentially abandoned the Gulf of America except for its (fading?) carbon disposal ambitions, will participate in the upcoming Gulf lease sale? Politically, failure to participate would not seem to be very astute given the Administration’s promotion of domestic production and energy dominance.

Oil Now map
T&T – Exxon signing cermony

Posted in energy policy, Guyana, Offshore Energy - General | Tagged , , , , , | Leave a Comment »

Ørsted’s troubles and Atlantic wind decommissioning

August 14, 2025 by offshoreenergy

Ørsted’s stock price plummeted on Monday following the announcement of a $9.4 billion rights issue to fund the Sunrise Wind project. The share price has remained depressed (chart below).

Also, although Ørsted attributes its financial woes to the change in US policies, it’s apparent in the second chart (5 year trend) that the decline in Ørsted’s valuation has been ongoing since 2021.

In March, Fitch downgraded Ørsted’s rating to BBB from BBB+, and its subordinated rating to BB+ from BBB-. Further downgrades would seem to be a distinct possibility.

Meanwhile, decommissioning financing for the 3 Ørsted projects under construction in the US Atlantic is far from assured:

  • Revolution Wind: As they did for Vineyard Wind, BOEM approved Ørsted’s request to defer full decommissioning financial assurance until 15 years after the beginning of construction (see attached letter). This approval was prior to the Renewable Energy Modernization Rule (effective June 29, 2024), which eliminated the need for such waivers.
  • Sunrise Wind: Ørsted is now solely responsible for funding and constructing this project given the company’s failure to find investment partners. Presumably, decommissioning financial assurance was not required given BOEM’s latitude under the so-called “Modernization Rule.”
  • South Fork Wind: As is the case with Sunrise Wind, BOEM presumably allowed Ørsted to defer financial assurance for decommissioning as permitted by the “Modernization Rule.”

According to Ørsted, almost 70% of the turbines are installed at Revolution Wind and the first foundations have been installed at Sunrise Wind. South Fork Wind, 12 turbines and an offshore substation, is complete.

Given Ørsted’s strained finances, will BOEM now opt to require decommissioning assurance as provided for in 30 CFR § 585.517?

Ørsted’s situation is atypical in that the Danish government owns a majority (50.1%) stake in the company and Equinor, which is 2/3 Norwegian govt owned, holds a 9.8% stake. How will government ownership factor into BOEM decisions regarding decommissioning assurance? Note that Norwegian govt lobbying may have been one of the factors influencing the decision to allow the resumption of construction on Equinor’s Empire Wind project.

Meanwhile, two Danish opposition parties are calling for the state to relinquish its ownership stake in Ørsted.

REV_0486_Fin Assur Decom Departure Appr LtrDownload

Posted in decommissioning, Offshore Wind | Tagged , , , , , , , , | 1 Comment »

Rigs-to-Remission: cancer treatment from the oceans

August 13, 2025 by offshoreenergy

A sugar made by ocean bacteria has been found to trigger a powerful form of cell death that destroys cancer cells.

We have a new addition to the World Famous Rigs-to-Reefs +++ list – Rigs-to-Remission.

Scientists have discovered a sugar compound from deep-sea bacteria that can destroy cancer cells in a dramatic way. This natural substance, produced by microbes living in the ocean, causes cancer cells to undergo a fiery form of cell death, essentially making them self-destruct. In lab tests and in mice with liver cancer, the compound not only stopped tumors from growing, but also activated the immune system to fight back. This finding could pave the way for entirely new cancer treatments based on sugars from marine organisms.

Deepwater production platforms would be excellent bases for further studying and recovering these microbes.

Posted in Offshore Energy - General, rigs-to-reefs | Tagged , , , , | 1 Comment »

Legal sharks smell Sable’s blood in SYU waters

August 12, 2025 by offshoreenergy

In addition to the Johnson filing, at least 7 other law firms (links below) have announced class action litigation alleging that Sable Offshore made false or misleading statements regarding the restart of Santa Ynez Unit production.

Perhaps working in Sable’s favor is the fact that the Federal government (BSEE) made a similar production restart announcement nearly 2 months after Sable, declaring victory and seemingly taking credit for the achievement:

“This is a significant achievement for the Interior Department and aligns with the Administration’s Energy Dominance initiative, as it successfully resumed production in just five months.“

Will the Dept. of Justice intervene on behalf of Sable?

Meanwhile, Sable’s share price rebounded in mid-July and is holding up surprisingly well (see below). Perhaps investors don’t see the class action suits as a significant incremental threat given the risks associated with decisions by 8 California agencies, Santa Barbara County, and various judges, and the persistent challenges by well-organized opponents of offshore production.

Posted in California, Offshore Energy - General, Regulation | Tagged , , , , , , | Leave a Comment »

Offshore wind: End of the decommissioning free ride?

August 11, 2025 by offshoreenergy

The Dept. of the Interior is reviewing offshore wind regulations including “the Renewable Energy Modernization Rule, as well as financial assurance requirements and decommissioning cost estimates for offshore wind projects…”

Concerns about offshore wind financial assurance were first raised on this blog in response to a precedent setting waiver of the “pay as you build” requirement. Vineyard Wind was authorized to defer providing the full amount of required decommissioning financial assurance until year 15 of actual operations.  The waiver request, which had been denied in 2017, was resubmitted in 2021 and approved. This questionable decision was consistent with the administration’s enthusiastic promotion of accelerated offshore wind development.

BOEM’s streamlining rule codified the deferred financial assurance option. The rule authorizes the transfer of decommissioning risks from developers to taxpayers and consumers by (1) not requiring any additional supplemental financial assurance at the Construction and Operations Plan (COP) approval stage, (2) not requiring supplemental assurance at the installation stage, and (3) providing for incremental supplemental assurance post-installation (e.g. for Vineyard Wind, the full amount is not due until 15 years after installation). See the rule’s previous and current language in the table below (emphasis added).

30 CFR 585.516 – What are the financial assurance requirements for each stage of my commercial lease?

financial assurance required before BOEM will: language prior to 4/24/2024 “modernization” rulecurrent language
Approve your COPA supplemental bond or other financial assurance, in an amount determined by BOEM based on the complexity, number, and location of all facilities involved in your planned activities and commercial operation. The supplemental financial assurance requirement is in addition to your lease-specific bond and, if applicable, the previous supplement associated with SAP approval.There is no supplemental bond requirement at the COP approval stage.
Allow you to install facilities approved in your COPA decommissioning bond or other financial assurance, in an amount determined by BOEM based on anticipated decommissioning costs. BOEM will allow you to provide your financial assurance for decommissioning in accordance with the number of facilities installed or being installed. BOEM must approve the schedule for providing the appropriate financial assurance coverage.A supplemental bond or other authorized financial assurance in an amount determined by BOEM based on anticipated decommissioning costs of the proposed facilities. If you propose to incrementally fund your financial assurance instrument, BOEM must approve the schedule for providing the appropriate financial assurance.

The current financial assurance language is fuzzy enough that BOEM could deny deferred funding requests and require full financial assurance at the time facilities are installed. However, revising the language to clearly require that assurance be fully demonstrated prior to installation would provide clarity and eliminate the deferral option going forward.

The more difficult challenge may be adjusting financial assurance requirements for the projects already under construction. It’s also important to ensure that parent corporations are not shielded from decommissioning and other liability risks.

Posted in decommissioning, Offshore Wind, Regulation | Tagged , , , , | Leave a Comment »

The winds of change! 😉

August 8, 2025 by offshoreenergy

2023 vs. 2025: Not so subtle changes

BOEM tweet (12/8/2023): Offshore wind is a once-in-a-generation opportunity to build a new clean energy industry, tackle the climate crisis, and create good-paying jobs, while ensuring economic opportunities for all communities.
BOEM tweet (7/31/2025): America’s offshore energy resources are powering the nation. In FY2024 that looks like 668M barrels of oil, 700B cubic feet of natural gas
BSEE 2023 logo
BSEE 2025 logo

BTW, the new BSEE logo appears to have been influenced by the masterpiece Rig at Sunset 👍 😉

Rig at Sunset

Posted in energy policy, Offshore Energy - General, Offshore Wind, Uncategorized | Tagged , , , , | Leave a Comment »

Dept. of the Interior is reconsidering approval of US Wind Construction & Operations Plan

August 7, 2025 by offshoreenergy

A new court filing (attached) informs that the Dept. of the Interior is reconsidering the Construction & Operations Plan (COP) approval for US Wind’s Maryland Offshore Wind (“MarWin”) Project (maps above). That approval is the subject of litigation filed by Ocean City MD and others.

The key section of the Federal government’s filing is pasted below.

  1. An extension in this case is necessary as Interior intends to reconsider its COP approval and move in the District of Maryland—the first-filed case—for voluntary remand of that agency action. See, e.g., Util. Solid Waste Activities Grp. v. EPA, 901 F.3d 414, 436 (D.C.Cir. 2018) (recognizing that administrative agencies have the authority to reconsider their decisions). The outcome of Interior’s reconsideration has the potential to affect the Plaintiff’s claims in this case.
Maryland Offshore WindDownload

Posted in energy policy, Offshore Wind, Regulation | Tagged , , , , , | Leave a Comment »

Nantucket Current opinion piece challenges Select Board rhetoric

August 6, 2025 by offshoreenergy

Victoria Bonnet’s piece in the Nantucket Current challenges certain assertions made at the Select Board’s July 29 press conference. Key points:

“The government documents for ALL the Atlantic projects make it clear that there will be no benefit to climate change from implementing wide scale offshore wind.”

“And how is it possible that an attorney representing an island that is receiving the full brunt of the environmental impacts from this massive industrial project is lecturing the press that historic preservation can co-exist with offshore wind? The sight of just the first 40 towers from Vineyard Wind makes it clear they can’t.”

“Blindly following public relations statements about offshore wind as a critical solution to climate change that must be implemented immediately is how we got here in the first place. It has become clear that Nantucket receives no benefits from, but is significantly harmed by, Vineyard Wind. Our Select Board’s role should not be to advocate for any energy source that harms Nantucket.”

“Dawn Hill, a signatory to the Good Neighbor Agreement and the current Select Board Chair, was a bright spot in the meeting. Her acknowledgment that the project is way more impactful than communicated at the time the Good Neighbor Agreement was signed gives hope that more rational thinking and action is on the way.“

Posted in Offshore Wind, energy policy, climate | Tagged , , , , , | Leave a Comment »

Denmark relies heavily on imported power

August 6, 2025 by offshoreenergy

As indicated in the Jens Christiansen graphic above, Denmark’s net imports exceeded 80% of demand several times in July. Per Jens, a Danish physicist, “this is the downside of being a wind leader we have to talk about.”

Posted in climate, energy policy, Offshore Wind | Tagged , , , | Leave a Comment »

Gulf oil production inched up in May

August 5, 2025 by offshoreenergy

With deepwater projects ramping up, modest production growth should continue over the near to intermediate term.

At the end of September, when the July production figures are released, we should get a better sense of the temporary reduction in production caused by zinc contamination in the Mars pipeline system.

Posted in Gulf of Mexico, Offshore Energy - General, pipelines | Tagged , , , , | Leave a Comment »

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