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[New Zealand] FPSO Umuroa (Scrapped)

Posted: Sun Aug 30, 2020 2:45 am
by escveritas
10.04.2020
BW OFFSHORE: UPDATE ON FPSO UMUROA

With reference to stock exchange releases dated 14 September 2019 and 31 October 2019 related to the termination notice from Tamarind Taranaki Limited (TTL) for the FPSO Umuroa operating on the Tui field offshore New Zealand.

BW Offshore has as of 9 April 2020 not been able to disconnect the FPSO Umuroa from the Tui field. The Company has previously communicated it expected to disconnect from the field and sail away to Singapore by the end of March.

Following the termination of the FPSO lease and operate contract, BW Offshore began preparatory work to start demobilisation. In October 2019, BW Offshore commenced discussions with regulatory agencies regarding disconnection in accordance with a 2017 ruling (2017 Ruling) of the Environmental Protection Authority (EPA) of New Zealand. The 2017 Ruling allows lay down of risers on the seabed for the FPSO to safely disconnect and sail away. The risers are the responsibility and property of TTL. BW Offshore have no responsibility related to this equipment. TTL is insolvent and in liquidation and is currently not able to execute disconnection activities as per the Charter Contract.

The Company considers that the best and safest approach for disconnection is to follow the procedure in the 2017 Ruling and cap and lay down the risers on the seabed pending removal of the risers as part of full field decommissioning (which is not a BW Offshore responsibility). In March 2020, the EPA imposed abatement notices to prevent BW Offshore from disconnecting the risers in accordance with the 2017 Ruling on the basis that circumstances have changed since the 2017 Ruling was granted. BW Offshore challenged the imposition of the abatement notices in the Environment Court and the court lifted these notices. The EPA appealed this decision and on 6 April the High Court of New Zealand decided that the abatement notices should remain in place.

The Company is taking advice on whether to appeal the recent High Court decision which contains certain inaccurate statements and gives the impression that BW Offshore was in a partnership or joint venture with TTL. This is not the case. BW Offshore was a service contractor to TTL and has no ownership interest in the field.

Due to uncertainty whether BW Offshore may disconnect using the 2017 Ruling, combined with the COVID-19 situation and the onset of the southern hemisphere winter, the Company has decided to plan a for lay-up of the unit on the field until further clarification can be received from authorities.

BW Offshore will continue to work with the New Zealand authorities to develop a new plan for demobilisation.

A significant portion of the estimated USD 20 million demobilisation cost has been incurred to date as preparatory work has been done and support vessels for demobilisation had been mobilised prior to abatement notices being imposed by the EPA.

Re: FPSO Umuroa

Posted: Fri Oct 23, 2020 2:53 pm
by escveritas
BW OFFSHORE: FPSO UMUROA UPDATE

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The Board of Directors of BW Umuroa Pte. Ltd. (BWU), a wholly owned subsidiary of BW Offshore, has today resolved to place BWU into voluntary liquidation. BWU is the owner and operator of the FPSO Umuroa which is presently located on the Tui oil field offshore New Zealand. Reference is also made to the announcement made on 10 April 2020.

The owners of the Tui field Permit, Tamarind Taranaki Ltd. (Tamarind), went into insolvency in December 2019, without any funding secured for decommissioning and abandonment liabilities. In March 2020 the New Zealand Government, through the Ministry of Business, Innovation and Employment (MBIE), assumed full responsibility for the decommissioning of the field and for disconnection of the FPSO.

After almost a year of continuous efforts to reach an agreement relating to the disconnection of the FPSO or get cost covered to stay on the field until MBIE is able to execute field decommissioning, the directors and shareholder of BWU have been left with no choice but to place the company into voluntary liquidation in order to prevent further accumulation of unsustainable losses.

Following the liquidation of Tamarind in 2019, BWU has paid in full the expenses involved in maintaining the FPSO on location and in compliance with all regulatory requirements. This has included full remuneration of the local crew and payments to suppliers. BWU will ensure that no contracted party or crew member is left out of pocket as a result of the steps it has been forced to take.

“We have assumed responsibilities far beyond the scope of the contract to ensure the safety and integrity of the vessel, and the protection of the environment, pending an agreement with MBIE to move ahead with the FPSO disconnection”, said Marco Beenen, the CEO of BW Offshore.

MBIE has publicly recognised that BWU is a victim of the insolvency of the field operator Tamarind.

“We have not been able to reach an agreement with MBIE which provides a viable solution despite significant efforts from our side, which includes offering to plan and execute the disconnection for MBIE at cost and without any profit”, said Marco Beenen. “As it now stands, in addition to a significant accumulated cost, we are still incurring more than USD 1 million per month to keep the FPSO Umuroa in compliance with regulatory requirements, and this cost is expected to increase as time progresses. This is unsustainable for us as a company.”

OPERATIONAL IMPLICATIONS
The FPSO Umuroa has been, and presently remains, safely moored to the Tui field, and BW Offshore will work with the liquidators to ensure the safety of the crew, the integrity of the FPSO, and continued care and respect for the environment. The FPSO no longer contains crude in the tanks and has minimum amount of fuel onboard to ensure a safe transition to the liquidators.

FINANCIAL IMPLICATIONS
More than USD 21 million has been incurred in 2020 alone to keep the FPSO on site and in compliance with regulatory requirements during the period, including demobilisation costs for the earlier attempt to disconnect the vessel. Following the termination of the FPSO contract by Tamarind in 2019, and subsequent insolvency, BW Offshore has not received any payments due under the contract for more than 12 months. At the end of the contract, 31 December 2019, this amounted to USD 31 million. All unpaid invoices have already been provided for.

As a result of the voluntary liquidation, the liquidators will take into custody and control all the assets and property of BWU, and thereafter apply these in satisfaction of BWU’s liabilities to its creditors. BW Offshore will no longer have control over FPSO Umuroa. Consequently, it is expected that remaining net book value of USD 21 million on the unit will be written down to zero.

Re: FPSO Umuroa

Posted: Wed Mar 16, 2022 3:10 am
by escveritas
Recycling the FPSO Umuroa in compliance with Hong Kong Convention
14.03.2022

BW Offshore has signed an agreement to recycle the FPSO Umuroa in compliance with the Hong Kong International Convention at Baijnath Melaram (‘the Yard’) in India.

The sale will generate USD 13.5 million in net liquidity.

The Yard is certified to ISO standards and has been issued with a Statement of Compliance by Class NK in accordance with the IMO Resolution MEPC.210(63) and the Hong Kong International Convention for the safe and environmentally sound recycling of ships.

BW Offshore will nominate a third-party to be on site at the recycling yard to ensure Health, Safety and Environmental regulations are followed. A Ship Recycling Plan has been prepared and provided by the Yard in cooperation with the Gujarat Maritime Board in compliance with the above regulations. To further incentivise safe operations, the Company will pay a “safe recycling” bonus upon completion.

Re: FPSO Umuroa (Scrapped)

Posted: Sat Jun 25, 2022 10:25 am
by escveritas
Impairment and gain on sale of shares
14 February 2022

BW Offshore has decided to record an impairment to the book value of the FPSOs BW Athena, Espoir Ivoirien, Sendje Berge, Petróleo Nautipa and Umuroa amounting to USD 66.6 million in the fourth quarter of 2021. The impairment reflects reduced expectation of longer term extensions to current contracts for the listed vessels that are still in operation, as well as limited potential for future redeployment for the same units and for the abovementioned FPSOs that are in lay-up.

In addition, the company will record an impairment of USD 23.8 million related to the previously announced sale of Joko Tole and associated loss from the transaction. The company will further reverse a previous impairment of USD 4.2 million related to the sale of Cidade de São Vicente.

BW Offshore will also record a gain of USD 14.9 million from the sale of shares in BW Energy in October 2021.

The impairments and gain will be included in the fourth quarter earnings and annual 2021 accounts which will be published on 28 February 2022.