Energy investment company Ramco Energy is shedding its oil and gas activities to focus exclusively on offshore wind. The move makes it the only UK-listed, pure-play, offshore wind energy company.
The news comes only 15 months after the launch of its offshore wind development subsidiary SeaEnergy Renewables Limited (SERL). Ramco will be renamed SeaEnergy.
Aberdeen-based Ramco says that potential investors for its offshore wind projects, such as clean tech and green investment funds, have been deterred by its ventures in Iraq, and its oil and gas interests. The company also says that renewable energy development gives the best value, certainty and control for its shareholders, who own 88% of SERL - the remaining 12% is owned by the SERL management team.
SERL launched with a team that had been involved with the world's first deepwater project, comprising two 5 MW Repower turbines located in waters 45 metres deep, at the Beatrice oilfield in north-east Scotland. Since then it has secured site licences for two wind projects totalling 1825 MW in the Scottish offshore round - both in collaboration with large utility partners.
It holds a 25% stake in a 920 MW project at the Beatrice, which it is developing with Scottish and Southern Energy subsidiary Airtricity. It also has a 25% share in a 905 MW project in partnership with German RWE at Inch Cape in the outer Tay estuary, ten miles off Scotland's east coast. SERL's 456 MW share of these projects takes the company almost half way to its five-year global goal for 1 GW of offshore wind capacity.
SERL has also teamed up with Portugal's EDP Renewables to bid for site concessions under the third round of UK offshore development. "The offshore wind opportunity is truly enormous, with over £130 billion of investment envisaged over the next 11 years through the Scottish and UK Offshore Rounds," says Stephen Remp, executive chairman of Ramco. "The North Sea is again opening up for development, this time driven by the global demand for clean energy. SeaEnergy will be at the heart of this revolution."
Ramco expects to take some time to dispose of its oil and gas portfolio to maximise value. Meantime, to fund SERL's development costs of its Scottish projects, it has secured £7.5 million of working capital from Lanstead Capital LP. This comprises £5 million worth of Ramco shares, with a further £2.5 million of shares subject to shareholder approval, giving Lanstead a 22% holding in the company. When it has disposed of its oil and gas assets Ramco intends to acquire the minority 12% of SERL from its team in exchange for shares in SeaEnergy plc.
Looking to the future
The initial focus for SeaEnergy will be on delivering its UK projects. Then, in the longer term, the company hopes to branch out internationally by establishing partnerships to fund, develop, build and operate projects or to acquire renewable assets. It has been invited to look at offshore opportunities in Europe, the US and the Far East, principally China. "We are in discussions with a number of players out there but it is very premature at this stage," says SERL's business development director, Allan MacAskill.