Page 25: of Maritime Reporter Magazine (February 2023)

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Booth 2121 force: energy transition.

The world, from governments to corporations to con- sumers, continues to push the envelope on the develop- ment and deployment of renewable energy, with the Wall

Street Journal reporting recently that 10% of all motor ve- hicles sold in 2022 were electric.

That said, the world remains a solid generation or two away from a signi? cant divorce from traditional fossil fu- els, and as Russia’s war in Ukraine has proven, energy se- curity tops most countries’ agendas.

“The transition, the talk of transition, the prospect of transition from fossil fuels does not exactly encourage companies to make the large investment in something that’s going to be operating for 20-25 years,” said McCaul. “These projects, like the one that Exxon Mobil is doing

Guyana, that’s its ? fth $12-13 billion project. It takes a bit of hope to invest in something that’s going to cost $12 bil- lion when everybody talks about getting rid of oil.”

Ultimately though, it comes down to the balance sheet, and big oil lost a literal fortune and amassed considerable debt in the six years before 2021. Highly leveraged and unwilling – or unable– to reward shareholders with stock buybacks and dividends, ? scal discipline came into vogue, effectively muting investment in new tech and projects, said McCaul.

In step with the energy transition, legislators globally are ratcheting up pressure via environmental legislation which, at best, will increase the cost of the project; at worst, will delay, suspend or shut it down altogether.

This is happening right now in Australia, where the

Barossa project is delayed. Late last year, the Australian court ruled against Santos, telling the company it had not consulted “all the indigenous people on the Tiwi Islands … for its environmental plan,” Reuters reported.

According to McCaul, delays like Barossa are unusual, for an offshore project to progress to this stage, then “out of the woodwork someone says it didn’t pass all of the en- vironmental tests. Then all of a sudden everything’s back to zero,” in terms of environmental approvals.

Regardless, Santos reported in December 2022 that it was applying for fresh approvals, and ? rst gas remains on track for 1H ’25.

All-in-all, McCaul is cautiously optimistic that, despite challenges, 2023 will end up being a solid year for ? oating production orders.

“We think maybe 15 could be ordered, but we don’t think 15 will be ordered because [of the limiting factors on the contractor side],” McCaul summarized. “Realistically, we’re looking at about nine to 11 FPSOs and a couple of FPUs ordered in 2023,” in addition to a few more FLNGs and a handful of new FSRUs if yard space is available.”

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