Norway’s BW Offshore fell to a loss in 2020 as impairments and increased expenses exacerbated a decline in revenue.

BW posted a loss of $272.3 million for the 12 months to 31 December, compared to a profit of $106.1 million for the prior year.

Weighing on the company’s results were impairments totalling $292.7 million, which BW said reflected uncertainty on vessel redeployment following the current market turmoil and future development of oil prices.

It recognised impairment charges against its BW Athena, BW Cidade de Sao Vicente, Espoir Ivoirien, Berge Helene, Polvo and Umuroa floating production, storage and offloading vessels.

The company said it was expecting a more challenging market for redeployments of mature FPSOs going forward and, as a result, was also considering recycling of some its laid-up units.

BW's total expenses also rose to $450.2 million in 2020, from $404.5 million in 2019, with BW noting it experienced increased expenses related to Covid-19 management last year.

Revenue decline

The company's results were also hit by a decline in revenue last year, from $947.4 million to $947.4 million.

Hurting revenue in 2020 was the shut down of the Yuum K’ak’ Naab FPSO after a tanker collision halted exports from Pemex’s Gulf of Mexico operations in July last year.

The company also saw lower revenues from the Sendje Berge FPSO due to a shut down after a pirate attack in July, while the end of contract for the BW Cidade de Sao Vicente also impacted revenues.

BW also noted that variation order revenue related to the Abo FPSO during 2020 was also lower compared to 2019.

Positive outlook

Looking ahead, BW said on Friday that the majority of its fleet remained on contract and expects its existing fleet to continue to generate significant cash flow moving forward.

It also anticipates there to be a number of awards in the coming years for large-scale offshore FPSO infrastructure projects as the oil and gas industry continues to progress long-term field development initiatives on larger projects with low break-even costs.

Earlier this week the company also signalled its intention to target the energy transition, with its planned investment in French offshore wind player Ideol.

“Over the past year, we have made significant progress in leveraging BW Offshore’s extensive operational and development capabilities to position as an early mover in the offshore energy transition,” BW chief executive Marco Beenen said on Friday.

“This is reflected in good progress on new infrastructure-like FPSO projects with attractive long-term returns, and by developing partnerships to position us in the forefront of floating offshore wind developments.”

Finance

Impairments sink floater specialist BW Offshore into the red