FPSO operator BW Offshore has determined to put its subsidiary which owns the FPSO Umoroa in New Zealand in liquidation to keep away from additional accumulation of losses following the allow operator’s insolvency.

FPSO Umuroa; Source: BW Offshore

The Board of Directors of BW Umuroa Pte. Ltd. (BWU), a wholly-owned subsidiary of BW Offshore, has resolved to put BWU into voluntary liquidation.

BWU is the proprietor and operator of the FPSO Umuroa, which is presently positioned on the Tui oil area offshore New Zealand. The FPSO has been working on the Tamarind-operated area since 2007.

However, in October 2019, Tamarind terminated the FPSO Umuroa’s contract, efficient from December of the identical yr.

Come December and Tamarind went into insolvency, with none funding secured for the FPSO decommissioning and abandonment liabilities.

BW had hoped to search out redeployment alternatives for the FPSO and disconnect it from the sector and sail away to Singapore by the tip of March 2020.

In March 2020, the New Zealand Government, via the Ministry of Business, Innovation and Employment (MBIE), assumed full duty for the decommissioning of the sector and for disconnection of the FPSO.

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In an replace on Friday, BW stated that, after virtually a yr of steady efforts to succeed in an settlement referring to the disconnection of the FPSO or get the price lined to remain on the sector till MBIE is ready to execute area decommissioning, the administrators and shareholder of BWU have been left with no selection however to put the corporate into voluntary liquidation to be able to forestall additional accumulation of unsustainable losses.

Following the liquidation of Tamarind in 2019, BWU has paid in full the bills concerned in sustaining the FPSO on location and in compliance with all regulatory necessities. This has included full remuneration of the native crew and funds to suppliers.

BWU stated it’ll make sure that no contracted occasion or crew member is neglected of pocket because of the steps it has been pressured to take.

“We have assumed obligations far past the scope of the contract to make sure the protection and integrity of the vessel, and the safety of the atmosphere, pending an settlement with MBIE to maneuver forward with the FPSO disconnection”, stated Marco Beenen, the CEO of BW Offshore.

MBIE has publicly recognised that BWU is a sufferer of the insolvency of the sector operator Tamarind.

“We haven’t been capable of attain an settlement with MBIE which supplies a viable resolution regardless of important efforts from our facet, which incorporates providing to plan and execute the disconnection for MBIE at value and with none revenue”, stated Marco Beenen.

“As it now stands, along with a big accrued value, we’re nonetheless incurring greater than $1 million monthly to maintain the FPSO Umuroa in compliance with regulatory necessities, and this value is anticipated to extend as time progresses. This is unsustainable for us as an organization”.

Over $21 million incurred to maintain FPSO on-site

The FPSO Umuroa has been, and presently stays, moored to the Tui area, and BW Offshore acknowledged it’ll work with the liquidators to make sure the protection of the crew, the integrity of the FPSO, and continued care and respect for the atmosphere.

The FPSO not comprises crude within the tanks and has a minimal quantity of gas onboard to make sure a secure transition to the liquidators.

More than $21 million has been incurred in 2020 alone to maintain the FPSO on-site and in compliance with regulatory necessities throughout the interval, together with demobilisation prices for the sooner try to disconnect the vessel.

Following the termination of the FPSO contract by Tamarind in 2019, and subsequent insolvency, BW Offshore has not…

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