BW Offshore is a step closer to recovering the Cidade de São Mateus floating production vessel to shore for repairs more than a year after it was damaged in a fire.
The fire, on 11 February 2015, offshore Brazil, saw nine of the 74 crew die and 26 require medical attention. The unit was operated for Petrobras by BW Offshore on the Camarupim and Camarupim Norte fields in Espirito Santo littoral, about 120km from the coast in south-eastern Brazil.
The full extent of the damage is unlikely to be revealed until the vessel is towed to a yard, which will happen once riser and mooring disconnect work, which started in December, is complete, BW Offshore said as part of an interim market update.
Factors that led to the blast, according to a statement released by Petrobras in June last year, were non-compliance with operational procedures for fluid-pumping operations, the installation of a pipe rack without the correct technical specifications and registered incidents of non-compliance or alterations in security procedures. However, a detailed report has yet to be released.
While a large proportion of the costs relating to the fire should be recouped through insurance cover, BW Offshore said it would record an additional impairment of US$85 million related to non-recoverable losses and damages to the FPSO. What's more, it is also recording a $49.3 million impairment related to other vessels and a $186.9 million impairment related to goodwill, due to the broader, prolonged downturn in the industry.
The firm, which operates 17 floating production vessels (FPSOs), of which 14 FPSOs and one floating storage and offloading vessel are owned, said it was back on track with the North Sea Catcher FPSO project, which remains within budget with first oil expected in 2017. BW Offshore has previously reported that hull activities on the project for Premier Oil had slipped, due to the yard's inability to progress the hull delivery in accordance with the contractual schedule. A mitigation plan was implemented and no further slippage seen.
Overall uptime on the firm's fleet in Q4 was 99.6% excluding the Cidade de São Mateus.
During Q4, BW Offshore received a two-year contract extension for the lease and operation of the FPSO Polvo. The FPSO is operating on the Polvo field offshore Brazil for Petrorio. The firm period has been extended to Q3 2018 (from Q3 2016), with options until Q3 2022.
In January 2016 BW Offshore also received a one-year contract extension for the lease and operation of the FPSO Umuroa. The firm period has been extended to Q4 2017 (from Q4 2016). The FPSO is operating on the Umuroa field offshore New Zealand for AWE.
The finance lease for FSO Belokamenka was terminated during the quarter and the unit was redelivered to BW Offshore. BW Offshore and Ithaca Energy have agreed on a termination of the FPSO BW Athena, and the unit will be demobilized in February 2016.
The company operates the FPSO Peregrino for Statoil and Sinochem on the Peregrino oil field and the FPSO P-63, owned by Petrobras and Chevron, which operates on the Papa Terra field offshore Brazil, in a joint venture with Queiroz Galvão Óleo e Gás. This operation started in November 2013 and will end in May 2016.
Except for FPSO Azurite, that has been returned by the client before the end of the fixed contract and is being marketed for new projects, and the redelivery of FSO Belokamenka, all other FPSOs and FSO are on contract per the end of the quarter.
Read more
Subscribe
