Published in Oil Industry News on Tuesday, 26 May 2015
BW
Offshore, an Oslo-based provider of floating production systems to the
international oil and gas industry, has reported that its net profit for
1Q 2015 has dropped amounting to $5.8 million compared to $12.7 million
in the 1Q 2014.
According to the company, this change relates to
lower revenue due to FPSO Cidade de São Mateus being off-hire after the
accident that occurred on February 11, 2015.
The company further
reports that operating revenues for the quarter amounted to $236.8
million, a decrease of $28.0 million (11%) ($264.8 million).
Operating
expenses amounted to $143.7 million, a decrease of $11.7 million (8%)
($155.5 million). EBITDA for the first quarter amounted to $93.2
million, a decrease of $16.0 million (15%) ($109.2 million).
Operations
BW
Offshore operates 17 units. The owned fleet consists of 14 FPSOs and
one FSO. Average uptime during the first quarter was 94.4% (99.8%). The
lower uptime was caused by the off hire of FPSO Cidade de São Mateus.
On
February 11, 2015, there was a gas explosion onboard the FPSO Cidade de
São Mateus, operating on the Camarupim and Camarupim Norte fields for
Petrobras in Espirito Santo Littoral. Production was stopped and the
unit has been shut down since the accident. The accident resulted in
nine fatalities and 26 crew needing medical attention of a total crew of
74. According to BW Offshore, the joint investigation with Petrobras
was started immediately after the accident. The investigation was
completed by end of April and signed by both companies.
In
parallel with the investigation damages to and necessary repairs of the
unit have been undertaken and are still ongoing. The first phase of the
operation has been to stabilise the unit, free process and subsea
systems of hydrocarbons, empty the unit of cargo and disconnect the unit
for transport to a yard for repairs. The cost of repairs are still
being assessed together with impact from impairment to be taken for
damages incurred.
BW Offshore carries insurance cover on a fleet
wide basis, for its crew and support staff, pollution and clean up and
any damage to vessels. In addition, the FPSO Cidade de São Mateus is
also covered by a loss of hire insurance. The accident and its
consequences will to a large extent be covered by these policies and BW
Offshore is working closely with insurers and their loss adjusters in
the recovery operations.
Outlook
“The short
term outlook for BW Offshore’s products and services has changed due to
the drop in oil price. However, more recently we have seen an
improvement in project activity related to previously identified
prospects,” BW Offshore said.
The company further said that it expects to increase activity on FEED and bidding in the second half of 2015.
BW
Offshore still expects outsourcing of production to be a cost effective
solution for oil companies to pursue oil development initiatives going
forward.
In its first quarter results report, BW Offshore said
that its cash flow from the operating units is to a large extent
mitigated by the loss of hire insurance for Cidade de São Mateus in the
coming year. Redeployment of units coming off contracts will depend on
oil price development and related to this, the number of new
developments.
The majority of BW Offshore’s fleet remain on long
term contracts with national and independent oil companies. “The fleet
will continue to generate a healthy cash flow in the time ahead,” the
company concluded.
Source: www.offshoreenergytoday.com