Teekay Offshore Partners L.P. (NYSE:TOO) (Teekay Offshore or the Partnership) introduced right now that sure of its subsidiaries have entered right into a settlement settlement with Petróleo Brasileiro S.A. and Petroleo Netherlands B.V. – PNBV S.A. (collectively Petrobras) with respect to varied disputes referring to the previously-terminated constitution contracts of the HiLoad DP unit and Arendal Spirit unit for upkeep and security (UMS).
As a part of the settlement settlement, Petrobras has agreed to pay a complete quantity of $96 million to Teekay Offshore, which incorporates $55 million that’s payable unconditionally inside 30 days. The remaining $41 million is to be paid in two separate instalments of $22 million and $19 million by the tip of 2020 and 2021, respectively, topic to sure potential offsets extra totally described beneath.
If within the unusual course of enterprise and previous to the tip of 2021, new constitution contracts are entered into with Petrobras in respect of particular Teekay Offshore belongings (being Arendal Spirit UMS, Petrojarl Cidade de Rio das Ostras FPSO and Piranema Spirit FPSO), the deferred $41 million (payable in two instalments in 2020 and 2021, respectively) will probably be diminished by 40 % of any income really acquired on this similar interval from such new contracts (Offset Amounts). There are not any contracts in place at the moment that might end in any Offset Amounts being generated and neither Petrobras nor Teekay Offshore have any obligation to enter into such contracts and moreover, there isn’t a obligation to carry any of the designated belongings as out there for constitution by Petrobras.
In the fourth quarter of 2018, Teekay Offshore expects to acknowledge the above-mentioned settlement, which is predicted to extend Teekay Offshore’s revenues by roughly $91 million, which represents the current worth of the longer term money settlement quantities.
In addition, Teekay Offshore has, by means of separate subsidiaries, entered into an additional settlement settlement with Petrobras close to a dispute referring to the constitution of the Piranema SpiritFPSO pursuant to which Teekay Offshore has agreed to a discount in constitution price totaling roughly $11 million, which is predicted to be credited to Petrobras over the remaining contract time period. As at June 30, 2018, this quantity was already accrued in Teekay Offshore’s monetary statements.
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“Over the previous decade, we now have constructed a powerful partnership with Petrobras. Petrobras has grown to change into one in every of our largest prospects, and we sit up for additional strengthening this long-term partnership sooner or later,” commented Ingvild Sæther, President and Chief Executive Officer of Teekay Offshore Group Ltd. “We settled the contractual disagreements in a really constructive method and we will now flip our full consideration to working collectively to ship offshore manufacturing and logistics options for the fast-growing Brazilian offshore market.”
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