Will Cities of the Future Float?

By Wendy Laursen 2015-07-30 20:26:46

A group of biologists, nautical engineers and biologists, backed by Paypal founder Peter Thiel, plan on building a floating city, or “seastead” by 2020.

The Seasteading Institute has run an architectural design contest for its Floating City Project held in partnership with DeltaSync (Netherlands) and judged by an international panel of experts.

The Seasteading Institute is a nonprofit think-tank working to provide a machinery of freedom to choose new societies on the blue frontier.

A feasibility report supports the idea that a seastead project is economically feasible, with each platform costing less than $15 million – about the same price as land in London or New York.

Here are the winners of the design competition:

First Place (Two entries tied for first place)

Artisanopolis – submitted by Gabriel Sheare, Luke & Lourdes Crowley, and Patrick White (Roark 3D)

First Place (Two entries tied for first place)

Storm Makes Sense of Shelter – submitted by Simon Nummy (Atkins)

Third Place

Prismatic Module Island – submitted by Matias Perez (Architect)


Expanding Ocean Network – submitted by Min Seok Kim (Seoul National University)


Metabolic City – submitted by Yin Tao-chiang (TDArch)


Design of Floating Sea Farms – submitted by Shinji Sato (Nihon University, Faculty of Science and Technology, Oceanic Architecture)

Honorable Mention

This entry did not conform to the contest rules, but the panel of judges agreed the design deserved an honorable mention for its “inventive and speculative spirit…the candidate re-imagined existing technologies to ameliorate our eventual dystopic fate of trash riddled oceans.”

Fantasea – submitted by Derek Ramsey (Cal Poly)


Look Out: MEO’s Big Plans

By Wendy Laursen 2015-07-30 19:36:20

The new CEO of Singapore-based Miclyn Express Offshore (MEO) plans to have the company in the offshore support industry’s top 10 by 2020.

Venkatraman Sheshashayee (Shesh) has over 28 years of experience in manufacturing, shipping and offshore oil and gas services. He has set up three greenfield companies, building them into regional industry leaders in their domains. Between 2012 and 2014, he was responsible for the turnaround of Jaya Holdings Limited, which was completed in a record 30 months. Now he has his sights on an ambitious growth program for MEO.

MarEx spoke to Shesh to find out his plans and hear about the challenges he faces.

You took over as CEO on July 1. What are your goals?

We aim to grow ourselves to twice our current size by 2020. That will bring MEO to the top 10 offshore support companies worldwide by fleet size, revenue, earnings and global reach.

Where is MEO now?

Headquartered in Singapore, MEO has been providing reliable offshore support services since the 1970s. We already have a strong, widespread and capable base. We have about 150+ assets spread across eight countries in three regions: the Middle East, South East Asia and Australia.

How can you contemplate growth under current market conditions?

MEO has some advantages that many of our contemporaries don’t. We’ve always focused on shallow-water production, so while other companies are suffering from drastic drops in their utilization, our utilization is still running at 85-90 percent.

We have some core customers in our region; we are very close to Saudi Aramco, Chevron, Brunei Shell and others, so there is a certain amount of visibility to our revenue. We have long-term contracts – our charter backlog is almost three years of revenue, so that gives us a certain amount of buffer.

What segments of the offshore market will you pursue?

We have agreed internally that about 70-75 percent of our business will continue to be shallow-water production and the rest will be in the exploration, development and construction markets. For some of that, we are aiming to get into Africa and Mexico.

What is ignored by most people, especially the media, is that 75 percent of all offshore production and exploration is still taking place in shallow water. Deepwater is the sexy topic, while shallow water is the boring and stable topic. We like boring and stable.

Tell us about your fleet.

We already have a wide range of vessels. We have a diverse fleet that includes crew boats, AHTSVs, AHTs, PSVs, ROV support vessels, dive support vessels, offtake support vessels, utility vessels, seismic support vessels, accommodation units and Workboats. We are able to service a variety of needs for our clients across all phases of the upstream oil and gas cycle. We also have a project business, EOS, that services our EPIC clients with a fleet of tugs and barges and other equipment chartered from third party operators.

How will your growth strategy change your vessel fleet?

We need to grow our fleet from 150 to about 200 vessels. Whether that growth will be organic or inorganic, time will tell.

We have a strong newbuilding team, and we have tasked them to build the next-generation designs – to talk to the designers and to talk to the market. We see that there are gaps in the market, and we want to be able to establish innovative and practical designs. For example, we definitely want to go in for LNG-powered vessels.

In one sense, the current market downturn is actually giving us the time to do things like this without constantly running after business.

What challenges do you face in Singapore?

Singapore has always been a fantastic home for most marine and offshore companies. The region is very welcoming. The rules and regulations are strict, but they are very fair. Additionally, most marine and offshore companies are not taxed heavily, so in that sense the environment for companies like ours has always been fantastic.

However, there is now a flipside, and there are two issues on that flipside. One is that costs in Singapore have gone up steadily over the last few years. One reason for this is inflation; the other is the exchange rate. The dollar here has become much stronger, so generally speaking fixed costs for most of the companies here has gone up substantially. That leads to a slight competitive disadvantage.

The other issue is that Singapore has tightened its rules on immigration, so the talent pool has shrunk. It is becoming a little tougher to stock your team with the right people.

How has the market downturn affected companies in Singapore?

Quite a few companies are going through a difficult time primarily because they indulged in excess. They have borrowed more money than they should. They have built more vessels than they should, so quite a few companies are going to find it very difficult servicing their debts and managing their balance sheets.

These companies face another problem. There has been a lot of speculative building in China, and when these vessels deliver the speculators stand them in Singapore and offer them to anyone at very low prices, undercutting most companies.

So, there are a few issues slamming all of us. Someone said it very beautifully some time ago: “Many of us will struggle. Some of us will suffer.”

What do you foresee for MEO for the coming year?

It’s not going to be fun the next year and a half, whatever time the oil prices take to play out, but during this time we are focusing on internal efficiency.

For the coming financial year we will not grow in terms of new fleet additions. Instead, we will focus on maintaining our strong utilisation levels and building contract backlog for our existing fleet. We will optimize costs, and we will reduce our debt.

With these four things as a very clear focus, we are preparing ourselves for the expected uptick in the market in the next 12-24 months. We will be ready to bring our plans to fruition.

Thank you, Shesh.

The opinions expressed herein are the author’s and not necessarily those of The Maritime Executive.


Protesters Succeed in Blocking Fennica

By MarEx 2015-07-30 17:53:34

Greenpeace protesters dangling from a bridge in Portland, Oregon, on Thursday have forced back the icebreaker that Royal Dutch Shell needs in Alaska to start drilling in the Arctic.

The 13 Greenpeace protesters, who rappelled down from the bridge over the Willamette River early on Wednesday, are hoping to shorten Shell’s Arctic drilling season by stopping the Fennica icebreaker, which is carrying emergency equipment that would cap any blown-out well.

Shell is not allowed to start drilling without it and the drilling season ends in October, when sea ice encroaches.

Greenpeace says Arctic drilling could be damaging to populations of whales, polar bears and walrus if there is an oil spill.

The activists are the latest group to stage waterborne demonstrations over the past three months in a bid to block Shell vessels from heading north, following similar demonstrations in Seattle and other Washington state port areas.

First Pass

The Fennica stalled once it neared the St. John’s Bridge on the Willamette, which leads to the Pacific Ocean. Protesters lowered themselves with ropes to prevent the ship from passing under the span, forcing the vessel back to port.

By late Thursday morning, more than two dozen kayakers were also on the river flanked by protesters dangling from ropes with large red and yellow banners chanting “Shell No” as a Coast Guard boat stood watch. The bridge has been opened to road and water traffic, and protesters are letting all other vessels pass under the bridge.

“When that ship turned, that was history,” said kayaker Michael Foster.

Ropes Slashed

A Coast Guard official has told reporters the Fennica now wants to depart late on Thursday afternoon.

Later on Thursday, a firefighter descended from the bridge and slashed part of a rope linking protesters, local broadcast footage showed. A few minutes later, two activists lowered themselves down from the bridge toward a boat and were arrested, Multnomah County Sheriff’s Office spokesman Steve Alexander said.

Dozens of kayakers were pushed to one side of the river by waterborne U.S. Coast Guard backed by sheriff’s deputies on loud speakers. The bridge and the river were closed to traffic.

Onlookers sympathetic to the protests gathered in a nearby park and occasionally cheered in support. Two activists were issued police citations, Greenpeace said.

The “Struggle for a Better World”

“In the struggle for a better world, these thirteen courageous souls are currently the last line of defense for the fragile Arctic,” said Kumi Naidoo, Executive Director of Greenpeace International. “This morning they turned Shell’s dangerous drilling support vessel around. On behalf of millions of people around the world they are saying Shell no to Arctic oil drilling. It is now time for President Obama to listen to the growing movement in the US and beyond. It is not too late for him to revoke Shell’s lease to drill and to send this ship back to port permanently.”

The 13 Greenpeace USA climbers remain suspended below the St. John’s Bridge, along with 13 more activists on the bridge providing support. They are prepared to hold the line as long as possible.

Safety Concerns

The U.S. Coast Guard issued warnings to the protesters, saying they were unwelcome, trespassing and violating the safety zone.

“Our primary concern is for the safety of the individuals on the water,” Coast Guard Petty Officer George Degener said. “We want them to understand we want them to exercise those First Amendment rights but we want them to be safe.”

Shell spokesman Curtis Smith said the company respects the rights of individuals to protest. “We just ask that they do so safely and within the boundaries of the law,” he said.

As the protests stretched into the afternoon, a U.S. judge in Alaska held Greenpeace in contempt and ordered it to pay fines of $2,500 per hour if the protest continues, with fines increasing daily to a rolling $10,000-per-hour after August 2.

Greenpeace USA Executive Director Annie Leonard said in a statement the organization was evaluating its options but that its protesters would stay in place for the time being.

“While we respect the courts, we also respect the increasingly urgent science that tells us Arctic oil needs to stay underground,” Leonard said.

Shell hopes to return to the Arctic for the first time since 2012, when it experienced a series of mishaps including the grounding of the oil rig Kulluk.


Senate Committee Lifts Crude Export Ban

By Reuters 2015-07-30 16:06:13

The U.S. Senate Energy Committee narrowly passed a bill to lift a 40-year old ban on the export of crude oil, but the measure faces an uphill battle in getting passed by the full Senate.

The bill to allow the United States to export oil and boost state revenue-sharing for offshore oil and gas drilling passed along party lines by a vote of 12-10.

It was the second significant step in two days for advocates of lifting the ban: Republican House Speaker John Boehner announced his support on Wednesday for repealing the law.

But Congressional Democrats remain reluctant to reverse the ban, citing, among other things, a fear it would lead to higher gas prices. Democratic support is seen as crucial to getting President Barack Obama to sign any legislation permitting crude exports.

Senate Energy Committee Chair Lisa Murkowski, a Republican senator from Alaska, has been a long-time advocate for lifting the ban, which she said was outdated due to the U.S. drilling boom that has propelled the country to vie with Russia and Saudi Arabia as the world’s biggest oil producer.

In addition to unlocking crude oil exports, Murkowski’s bill would speed up exports of liquefied natural gas and ensure that states that have offshore oil and gas development get their share of federal revenues.

Combining the revenues measure with repeal of the exports ban was an attempt by Murkowski to gain more Democratic votes.

Murkowski and Democratic Senator Mark Warner, of Virginia, released a report on Wednesday called “Empowering America: How the energy abundance can strengthen U.S. global leadership” that recommending lifting the ban, to allow the drilling boom to be an asset in foreign policy. (http://www.atlanticcouncil.org/publications/reports/empowering-america-how-energy-abundance-can-strengthen-us-global-leadership)

It was the first public endorsement of the lifting of the ban by Warner, who is not on the energy committee. But Murkowski will need to win many more Democrats for the bill to have a chance of advancing.

The bill will move to the Senate floor for wider debate after the August break.

Industry groups welcomed the bill’s passage and said it would be a boon to the U.S. economy and national security.

“Free trade in energy will allow America to harness the full economic opportunities created by our energy revolution,” said the American Petroleum Institute’s top lobbyist, Louis Finkel.

The Senate energy committee also voted 18-4 to back a broader energy bill, which supports workforce training in the energy sector and streamlines permitting for natural gas pipelines.


Matson Pays for Molasses Spill

By MarEx 2015-07-30 14:48:02

Matson Navigation has agreed to pay up to $15.4 million in restitution for the 2013 molasses spill in Honolulu Harbor. The company has also agreed to cease all molasses operation in Hawaii as well as pay for removing its molasses tanks and any remaining molasses. About 1,400 tons of molasses leaked into the harbor in September 2013 killing fish and marine life. The settlement includes a combination of cash, restoration and environmental funding.

Matson will pay Hawaiian government $5.9 million towards re-growing a coral damaged in the spill and reimbursing the state for its cleanup efforts. The company will also provide a contribution to the International Union for Conservation of Nature’s World Conservation Congress.

Estimates of the cost related to closing its molasses operations range between $5.5 million and $9.5 million. It is expected that Matson will spent about $15 million in settlement costs. Earlier this year, Matson Terminals plead guilty to federal criminal charges for illegally releasing molasses into the harbor and paid fines and restitution totaling $1 million, which include $600K that went to the Waikiki Aquarium and Sustainability Coastlines of Hawaii.


Oil Majors Cut Jobs

By MarEx 2015-07-30 14:23:14

Two of the UK oil and gas majors are cutting costs due to falling oil prices. Royal Dutch Shell is cutting 6,500 jobs and Centrica will release 6,000 employees. She Q2 profits fell by 37 percent. Most of Centrica employee cuts will take place in the UK. But, they will be creating close to 2,000 new jobs in other regions in the world.

Shell’s capital expenditures will be reduced by 20 percent to a total of $30 billion. It will also sell off assets worldwide between 2016 and 2018. Japanese energy company Idemitsu Kosan has agreed to purchase Shell’s 33 percent stake of Showa Shell refinery for about $1.4 billion.

While cutting costs, Centrica’s first half profits actually rose to £528 million ($822 million) from £265 million ($412 million) in the same period last year. It attributes the increase BG’s higher gas consumption due the harsh winter in the beginning of 2015.


Matson, Hawaii Reach Settlement

By MarEx 2015-07-30 11:22:24

Matson, Inc has agreed to pay up to $15.4 million in restitution for a 2013 molasses spill in Honolulu Harbor. The shipping company also agreed to cease its molasses operation in Hawaii and pay for the removal of its molasses tanks and any remaining molasses. About 1,400 tons of molasses leaked into the harbor in September 2013, killing more than 26,000 fish and marine life. The settlement includes a combination of cash, restoration efforts and environmental funding.

Matson will pay Hawaii $5.9 million towards re-growing a coral nursery damaged due to the spill and reimbursing the state for cleanup efforts. The shipper will also submit a contribution to the International Union for Conservation of Nature’s World Conservation Congress.

Estimates of the cost related to closing molasses operations range between $5.5 million and $9.5 million. When Matson’s settlement is satisfied, it will cost the company between 11.4 and $15.4 million.

Matson was founded in 1882 and provides shipping services throughout the Pacific.


Positive Signs For Scorpio Tankers

By MarEx 2015-07-30 10:53:53

Scorpio Tankers is expanding its fleet. The shipper has reached agreements with Hyundai Mipo Dockyard Co. Ltd. of South Korea (HMD) for four newbuilds. HMD will construct two MR product tankers and two Handymax product tankers for Scorpio. The pair of MR tankers cost about $34.5 million and the two Handymax tankers cost about $32.5 million. The vessels are to be delivered between the second and third quarters of 2017.

The contracts come with a fixed price and options for 12 additional ships of both sizes.

Scorpio’s orders follow Q2 results that exceeded analyst forecasts. The company took in a net income of $57.6 million, which raises its first half profit to $98.2 million. In the same period last year, the shipper suffered a loss of $11.2 million.

Scorpio has 12 vessels with payments totaling $596 million in its order book.