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Addax terminates Okwori contract for Sendje Berge FPSO

Sinopec-owned Addax Petroleum has terminated a contract for BW Offshore’s Sendje Berge floating production, storage and offloading vessel after losing an arbitration battle over dayrates earlier this year.

Oslo-listed BW said it had received a termination notice for the unit producing from the Okwori field off Nigeria.

The termination is effective from 6 November 2017. Addax has also requested that BW provide a demobilisation plan for the FPSO.

The contract cancellation follows an arbitration process launched in 2016 and won by BW earlier this year. The arbitration award, announced in the first quarter, required Addax to pay all dayrates claimed by BW Offshore.

The outstanding gross claim at the end of the first quarter 2017 was $61.8 million, BW said last week.

BW chief executive Carl Arnet said Addax had been paying only one-third of the agreed dayrate before the arbitration began.

He also said Addax had been looking for a replacement unit for the Sendje Berge, but warned that finding a replacement would be "a very expensive exercise" and "not very viable at current production rates". Addax signed a six-year extension for the FPSO in 2014, with a firm period through the first quarter of 2018. Addax had the right to exercise options for the final two years.

The FPSO has a production capacity of 50,000 barrels per day of oil and 55 million cubic feet per day of gas, as well as 2 million barrels of storage capacity. It has been producing at Okwori since 2005.