Floating production firm BW Offshore has started an arbitration process against Addax Petroleum Exploration over payment for use of the floating production, storage and offloading vessel (FPSO) Sendje Berge.
BW Offshore says Addax as "for some time not paid the company the full contractual rate for the FPSO Sendje Berge." BW Offshore says it considers the arguments for not paying the full rate unjustified, although it doesn't outline what these are. It has submitted a claim for US$52.6 million.
Meanwhile, the firm has been told that its contract with Petronas for the FPSO Berge Helene will not be extended beyond May 2017 (it had previously been extended out from Q2 2015). Berge Helene has been producing the Chinguetti field offshore Mauritania.
BW Offshore has also been told by Statoil that the Norwegian oil firm will not exercise options for extension of its contract beyond June 2017, due to a change in the operating model on the Peregrino field. BW Offshore operates the Peregrino FPSO, but doesn't own it.
Work on the Catcher project, meanwhile, remains within budget with first oil expected in the 2H 2017.
"We are pleased to see positive developments in several of our focus areas", said Carl K. Arnet, the CEO of BW Offshore. "The Catcher project is progressing well, the fleet performance is good, and our cost cutting initiatives are paying off with full effect from 2017. BW Offshore has established a solid runway and is well positioned to pursue value creating opportunities."
The firm said its cost reduction and efficiency program was progressing as planned. EBITDA for the third quarter was $76.9 million, a decline of $7.7 million
(9%). The reduction in EBITDA for the third quarter compared with the previous quarter was mainly a result of no further loss of hire insurance for Cidade de São Mateus which ended in May.
Operating profit for the quarter amounted to $19.2 million, a decrease of 23%.
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