Jamesian Philosophy Refreshed

I think this is amazing, for a lot of reasons. There's a big infrastructure deal in the works in the Persian Gulf. The Iraq Ministry of Oil has decided to buy the creation of am artificial island, from a Dutch marine construction company, Boskalis. Their plan involves the creation of two new pipelines and four new marine docks to create an island that will enable Iraq, through its Basra Oil company, to add 3 million barrels per day to its export capacity. It is amazing because I tend to think of infrastructure projects at this level as a thing of the past -- where "past" means Dwight Eisenhower and Robert Moses. Of course oil rigs and such get created, especially in the Persian Gulf. But this is a three-year construction project that could be disrupted at any time during that run by war or violence short of war, and that could easily end up a dead loss for Iraq or Boskalis if that happens. It's a gutsy move.

I wrote something recently for one of my content customers about the economics of offshore support vessels (OSVs). These are the specialized ships that provide a range of support services to offshore oil and gas drill platforms. The bottom line is that OSVs are a lousy investment idea. If given an opportunity to invest in such a vessel or in any corporate entity whose main line of business involves owning or operation such vessels: run the other way! There are too many of these darned things and (though I wasn't allowed to put it this bluntly for the commercial cite I was writing for), the oil majors take advantage of the fact that there are so many of them. They pocket the savings. Understanding the oversupply problem requires taking into consideration both cold stacked and warm stacked OSVs. To review: a warm stacked vessel is left at port, but continues in operating condition. It can readily be reactivated. Indeed, a warm stacked vessel continues to have a ...