Tensions in the Middle East have led a longtime Dallas oil and gas drilling service provider to expand into the growing renewable energy business away from the region.
Energy Equipment Resource is moving two liftboats from the Middle East to Taiwan to help build offshore wind farms, said Mike Mullen owner of the company.
The WhaleShark and KingFish, huge pieces of equipment sometimes called jackup barges, are aboard the Red Zed 11 ship which departed from Al Jazeera Port in Ras al Khaimah, United Arab Emirates, on Tuesday. The trip, through the Strait of Hormuz and Gulf of Oman, around India takes about 25 days.
The liftboats, which each can sleep and feed as many as 100 workers in 260 feet of water, have been hired by The Netherlands-based Boskalis, one of the largest marine construction companies, to work on new offshore wind farms.
Mullen has made a career of working the energy industry’s downsides and upsides as a buyer and seller of equipment and as a service provider.
“It’s my first time in an alternative energy project. We’ve been in oil and gas drilling, remediation, but never done anything with wind farms,” Mullen said. “I’m excited. It’s a very evolving market in Taiwan and Japan for wind farms and has parallels to the Northern Europe and the North Sea” where the wind farm industry has already grown significantly.
The energy industry service providers in many cases are the companies helping to build offshore wind farms. Another large self-propelled jack-up vessel, Zaratan, owned by Seajacks Japan left Northern Europe, where it’s been working on wind farms and arrived in Taiwan erlier this year.
Politics played into his decision to move his equipment, Mullen said, and politics created an opportunity for a U.S. service provider in Asia.
“I’m leaving a potential war zone in the Middle East to new area, Taiwan, which is closed off to Chinese equipment,” he said.
There’s a lot of posturing for international companies to get into the Asian market, he said, because China, for example, has the equipment, but political reasons keep it out of Taiwan.
Operating in the Middle East has become more expensive, Mullen said. “There are too many rigs in the Middle East looking for work.”
That’s cut the day rates companies are willing to pay, he said, while “insurance costs have skyrocketed due to the threat of the region turning into a war zone.”
Mullen purchased the liftboats in early 2017 from the bankruptcy liquidation of Houston-based Hercules Offshore. The purchase price of $15.5 million included a third liftboat, the Amberjack. He then purchased additional equipment from Hercules located in West Africa for $21.5 million.
Mullen has been in the energy service business since the late 1970s following a short but storied football career first at St. Marks School of Texas, then as an All-American at Tulane University. He was drafted by the Miami Dolphins in 1973 and in his rookie 1974 season played with the Dolphins as they beat the Minnesota Vikings in the Super Bowl.
He went to work for a drilling company after football and in the early 1980s was hired by the now defunct InterFirst Bank to manage the assets the bank ended up owning as loans to contract drillers collapsed in the energy recession.
In 1985, he started his own company by buying oilfield equipment from the bank at distressed prices to hold and market them when the downturn ended. And that’s what happened.