The phenomenal construction vessel Pioneering Spirit single-lifts large oil and gas platforms, which makes the installation and removal of these platforms safer and more efficient than ever.
The Pioneering Spirit is the brainchild of offshore entrepreneur Edward Heerema. Who wants to get to know the construction vessel has to read through the specifications. You will come across one astounding figure after another. The construction vessel is 382 meters long and 124 meters wide. The lifting device can remove an offshore platform weighing tens of thousands of tons at full sea in a single lift.
The flagship of offshore company Allseas combines this powerhouse with unparalleled precision, with the gigantic lifting arms that raise a platform being equipped with movement compensation. This makes them less sensitive to the waves that can make working at sea extremely risky and time-consuming. As a result the Pioneering Spirit can get even the biggest jobs done faster and safer than any other vessel. The amount Allseas founder Edward Heerema needed to invest in order to realize this world-class vessel also reflects all these superlatives: approximately 2.6 billion euros, which has been raised partially through bank financing.
Financing without a business case
While the banks were very impressed by Edward Heerema’s visionary plan, the vessel’s uniqueness made it impossible to draw up a business case for the financing that could capture returns and risks in spreadsheets. This didn’t, however, pose an insurmountable problem. Rabobank knows the maritime world and its leading entrepreneurs and as a result it understands the sector’s opportunities and dynamics and doesn’t think in terms of impossibilities.
Ton Wouterse, Head of Maritime & Offshore Sector at Rabobank, explains: "It's obviously impossible as a bank to assess all the technical aspects of such a megaproject in detail, while the fact remains that you're talking about a large investment. This is why you must make your assessment based on the market position and financial strength of the company behind the project. This means you look at the questions: How unique is the company's offering, what is the state of the balance sheet, and is the order portfolio filled with good orders?"
Knowledge and confidence
It’s also beneficial if as a bank you relate to the courage and vision of an entrepreneur who dares to look far into the future. This was especially important given that there was an offshore crisis due to the fall in oil prices when the construction of the Pioneering Spirit was fully underway and additional finance was needed. So it wasn’t the best time to look for extra funding. This is when Allseas found a partner in Rabobank who dared to provide the financing. “Anybody can do it when it’s smooth sailing. But we think you should also be there during more turbulent times. This means approaching a project based on a thorough understanding of the market and business and well-grounded confidence in the entrepreneur,” says Wouterse.
“You also have to be there during the turbulent times”- Ton Wouterse, Rabobank
Energy transition as growth market
Rabobank believed in the vision of the future that Edward Heerema has had since the 1980s. He envisioned at that time a market for a vessel that could lift large oil and gas platforms in a single lift. Platform removal at sea used to be a time-consuming and risky undertaking, partly because the platform had to be cut into pieces. A vessel that can lift it and place it on shore in one go considerably reduces the risks of hazards such as pollution at sea and expands the time window during which you can carry out the work.
Removing old existing platforms is required by law. Depletion of oil and gas fields will make part of the platforms unnecessary in the future. This is why Heerema envisioned a growth market and took an even longer-term view by foreseeing the energy transition. As the world becomes less addicted to fossil fuels, even more platforms will need to be removed safely and efficiently.
It was a plan that was met with amazement. Even if it were technically possible to build such a vessel, it still remained to be seen if and when the market would be ready for clearing or replacing production platforms. This question was crucial in order to defend the huge investments in the project. But Edward Heerema is, like all good entrepreneurs, visionary and tenacious.
He was proven right in 2016. The Pioneering Spirit lifted anchor en route to its first commission in Norway, which it carried out easily and successfully. The giant vessel is now in full operation. The construction ship set a world record in 2017 when it lifted Shell’s Brent-Delta platform from the North Sea and brought it safely on land where it could be dismantled and recycled in a responsible manner. A year later it succeeded in placing a 22,000-tonne drilling platform on its base in record time: the heaviest single lift installation job of all time. In addition to removing and placing platforms, the vessel lays pipes on the sea floor as its third key activity. It’s also breaking all the records in this field: both the speed at which the pipes are laid and the diameter and weight of the pipes are unrivalled.
“I am proud that we have been able to play a part in this as Rabobank”- Ton Wouterse, Rabobank
Proud of our part
Rabobank is now play a leading role with respect to the company’s refinancing by a consortium of banks. Wouterse: “The Pioneering Spirit has proven its merits and is an iconic ship in every regard. I have the greatest respect for entrepreneurs like Edward Heerema who conceive such ground-breaking ideas. We believe in focusing on the future and considering and anticipating challenges that will be faced in the future. We’re proud that we as Rabobank have been able to play a modest part in bringing this about. Proud is the right word to describe how we feel.”