Off Shore OpportunitiesPresented by John A Foord

Coordinator of Shortsea & Environment WGEuropean Seminar 2012

Off Shore Opportunities• Why should we focus our attention to this sector of our industry?

• Doom and gloom prevails over most Liner Trades at present, with no real prospects of a return to the ‘good old days’.

• This crisis was entirely self inflicted by the dominant lines trying to force each other from the markets.

• The tanker markets fare no better, as was succinctly shown during presentations in Sydney.

• The bulk markets are also suffering depression, to some extent caused by the major container operators getting involved in traditional bulk markets.

• The ‘off shore’ market does not in general suffer from these problems as it does not involve international trade.

• This market is on our doorstep and is set to grow year on year for the foreseeable future.

• We have established working & discussion groups for these other sectors, it’s time to put more focus ‘Off Shore’

Off Shore Opportunities

Off Shore Opportunities

Off Shore Opportunities• It’s not just oil & gas rigs.• It’s not just wind turbines.• It’s not just tidal & wave installations.• There is so much more to consider, each phase of operation has different

requirements; research, oceanography, survey (subsea and environment), construction, installation, maintenance, accommodation and decommissioning.

• All phases require a wide variety of vessel types including; tenders, support, dredgers, cable layers, heavy lift, survey, jack ups, semi-submersibles, floating accommodation, anchor handlers, platform supply, the list goes on.

• All of these vessel will at some time need the support of a good agent, experienced, dedicated and professional.

• Port calls are often very short and unpredictable, consequently the agent must be able to react and perform at short notice.

• We should encourage membership to ‘specialise’ to these requirements, those that have are reaping the reward.

Off Shore Opportunities

• The market continues to grow, a look at recent articles demonstrates accordingly.

• ‘Energy’s copper bottom future’, a 5 company, 3 country consortium that plans to put a large amount of copper across the North Sea to form a high voltage D/C cable between Norway & UK.

• ‘Record breaking North Sea Licensing Round’ referring to the latest licensing applications for oil & gas drilling. A total of 224 applications covering 418 blocks this year, compared to 187 applications last year.

• ‘Salmond announces £70m wave & tidal fund’, Scotland’s First Minister shows his Governments commitment to renewable energies.

• ‘Cameron to view revived Severn Barrage Plan’, The Prime Minister is briefed on plans for a £30bn 10 mile tidal barrage, which could provide 5% of UK’S electricity.

• ‘Malta applies for Euro 30m Off Shore Wind Fund’, the Maltese Government commenced studies for the viability of installation of shallow water turbines.

Off Shore Opportunities• At present wind farms are the largest growing sector of all renewables.• There are 568 installed offshore turbines in UK waters, and a further 665 under

construction, totalling 1,233 for an output of 4,217 MW.• Each turbine produces enough electricity annually to power 2,000 homes.• In the next 5 years there will be 8GW capacity installed, rising to 18GW by 2020,

representing 17% of UK requirements.• At present the UK’s offshore wind capacity installed is as much as the rest of the

world.• There are 15 operational wind farms in UK waters, with a further 7 in

construction, and 6 more with planning consent.• The first project was built in Blyth Harbour in 2001, the largest currently

operating is the London Array, producing 300MW, a considerable advance in just 11 years, which demonstrates the bright prospects ahead.

• Technology is advancing daily, as turbines get much larger and more efficient.

Off Shore Opportunities• Some facts worth contemplation;• Offshore wind farms bring a new multi-billion Euro industry, creating thousands of

jobs and providing clean, indigenous and cheaper electricity.• Renewable power installations accounted for 71% of all new installations in 2010.• More renewable power capacity installed in 2011 than any other year, 37% more

than during 2010.• Wind power accounted for 21% of new installations in 2011, 3rd largest after Solar

PV and gas.• There is enough wind around Europe’s coasts to power Europe seven times over.• Europe is the world leader in offshore wind with a cumulative capacity of 2,063

MW spread across 39 wind farms in nine European countries.• These produce 10% of the EU’s electricity and avoiding 200 million tonnes of CO2

emissions each year.• EWEA anticipate an average market growth of 28% over the next 12 years.

Off Shore Opportunities• As with any new technology, significant improvements still need to be made;• A Europe-wide offshore electricity grid needs to be put in place to bring more

effective distribution.• This would smooth the variability of the wind power produced and improve the

ability to trade electricity within Europe.• The supply chain needs to be improved to overcome bottlenecks, such as the

lack of suitable vessels.• Maritime spatial planning should be implemented to give long term viability and

forward planning.• Offshore research and development needs to be well funded to maintain

Europe’s technological lead, and enable investment in the areas less developed such as tidal, ocean thermal and even algae.

• The turbines are getting larger and in deeper waters offering further challenges.

Off Shore Opportunities• Let’s get a sense of proportion;

• 2.5 MW ~ that is a blue whale at full speed

• 81 MW ~ that is the Emma Maersk full ahead

• 300 MW ~ Thanet, UK largest operational wind farm

• 3,960 MW ~ Drax Power Station

Off Shore Opportunities• What are the challenges facing agents and brokers?• Do we need to be more proactive? • We need to demonstrate a greater level of understanding of specialist needs.• We are often dealing with people who have no maritime experience at all.• The agents role can be unduly complicated.• In recent times agency fees in offshore have been eroded.• We need to present a professional image to avoid further erosion and prove our

worth to the industry.• Agents, as in liner trades, are now being asked to give extended credit putting

strain on finances.• The offshore industry tend to view the agent as an extension of the

procurement function, rather than providing essential services with professional standards.

• However recent evidence shows some principals are now prepared to pay the agent for consultancy services, deserved in consideration of effort put in.

• This industry presents a great opportunity for agents and brokers. Perhaps ECASBA/FONASBA can capitalise and expose our professional standards.

Off Shore Opportunities• It is important we continue to improve our

standards of understanding and thereby the quality of services we are able to provide.

• Education provides an essential part of that process and we should ensure those involved possess sufficient knowledge.

• The Institute of Chartered Shipbrokers have recently launched their ‘Offshore Support Industry’ book.

• We need to explore all avenues of education services available and ensure our membership is advised of what is available.

Off Shore Opportunities

• Acknowledgements & resources;• Clarksons Port Services• B.W.E.A. – The British Wind Energy Association• Marico Marine• E.W.E.A. – European Wind Energy Association• Renewables UK• Oceanology International• The Institute of Chartered Shipbrokers.• Ocean Sp@ce• E.M.E.C. – European Marine Energy Centre• Energy Generation & Supply Knowledge Transfer Network.