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© Elnur/AdobeStock tively new force: energy transition. ratcheting up pressure via environmental legislation which,

The world, from governments to corporations to con- at best, will increase the cost of the project; at worst, will sumers, continues to push the envelope on the develop- delay, suspend or shut it down altogether. ment and deployment of renewable energy, with the Wall This is happening right now in Australia, where the

Street Journal reporting recently that 10% of all motor ve- Barossa project is delayed. Late last year, the Australian hicles sold in 2022 were electric. court ruled against Santos, telling the company it had not

That said, the world remains a solid generation or two consulted “all the indigenous people on the Tiwi Islands away from a signi?cant divorce from traditional fossil fu- … for its environmental plan,” Reuters reported. els, and as Russia’s war in Ukraine has proven, energy secu- According to McCaul, delays like Barossa are unusual, rity tops most countries’ agendas. for an offshore project to progress to this stage, then “out “The transition, the talk of transition, the prospect of of the woodwork someone says it didn’t pass all of the en- transition from fossil fuels does not exactly encourage vironmental tests. Then all of a sudden everything’s back companies to make the large investment in something to zero,” in terms of environmental approvals.

that’s going to be operating for 20-25 years,” said McCaul. Regardless, Santos reported in December 2022 that it “These projects, like the one that Exxon Mobil is doing was applying for fresh approvals, and ?rst gas remains on

Guyana, that’s its ?fth $12-13 billion project. It takes a bit track for 1H ’25.

of hope to invest in something that’s going to cost $12 bil- All-in-all, McCaul is cautiously optimistic that, despite lion when everybody talks about getting rid of oil.” challenges, 2023 will end up being a solid year for ?oating

Ultimately though, it comes down to the balance sheet, production orders.

and big oil lost a literal fortune and amassed considerable “We think maybe 15 could be ordered, but we don’t debt in the six years before 2021. Highly leveraged and think 15 will be ordered because [of the limiting factors on unwilling – or unable– to reward shareholders with stock the contractor side],” McCaul summarized. buybacks and dividends, ?scal discipline came into vogue, “Realistically, we’re looking at about nine to 11 FPSOs effectively muting investment in new tech and projects, and a couple of FPUs ordered in 2023,” in addition to a said McCaul. few more FLNGs and a handful of new FSRUs if yard

In step with the energy transition, legislators globally are space is available.” january/february 2023 OFFSHORE ENGINEER 31