Cosco axes Octabuoy project

The Singapore-listed Chinese yard group said poor market conditions have made it difficult to offload the unit that was ordered for a project east of Shetland.

ATP’s order for the semi-submersible Octabuoy concept at Cosco’s Nantong shipyard for its Cheviot oilfield development was chopped after Houston-based parent ATP Corporation went bankrupt.

Cosco said inJuly the hull was 96% complete and the topsides almost 48% complete.

The yard also said at the time that some potential buyers had shown interest in the unit, but this interest has now cooled, according to a statement from Cosco on Friday.

"While Cosco Nantong has been making efforts to find a buyer for the Octabuoy and several potential buyers had previously expressed interest, (it) has so far not entered into any agreement for the sale," it said.

"The steep fall in crude oil prices over recent months has had an adverse impact on the global offshore marine industry.

"This has made it even more difficult to secure a buyer for the Octabuoy as industry players have cut back even further on new orders.

"This difficulty is compounded by the specialised design of the Octabuoy and the substantive investment in the customised equipment that is required to continue the project."

In light of this, Cosco Nantong's management decided "to discontinue the project", which is expected to result in a one-off charge of around S$90 million (US$69.28 million).

ATP UK began screening alternative development concepts for the Cheviot project following a $133 million takeover by UK-based private equity player Petroleum Equity.

Cosco said in July that a default from ATP arising from bankruptcy would see the contract terminated, allowing it to complete the units or drop them, but also sell them if it wished.