Floater specialist BW Offshore is forging ahead on schedule with construction of the newbuild floating production, storage and offloading vessel for Santos’ Barossa field development offshore Australia, with overall completion of 67% at the end of April.
Hull blocks have been assembled in the floating dock and preparations for float out are progressing, with major equipment arriving at Dyna-Mac, the topsides construction yard in Singapore.
BW Offshore this year has divested two of its FPSO fleet — the BW Opportunity and the BW Athena — releasing a combined $130 million in liquidity.
The company is exploring the provision of an engineering, procurement, construction and commissioning and operations and maintenance services contract for a five-year transitional period with the mystery buyer of BW Opportunity.
“We deliver on our plan to generate value from our asset base through divestments and are discussing potential redeployment-related work for BW Opportunity with its new owner,” said BW Offshore chief executive Marco Beenen.
“This reflects a strong FPSO market with oil and gas companies seeking efficient solutions for safe, secure and reliable production.
“In this environment, we continue to selectively explore new energy infrastructure projects meeting our return criteria, while maintaining a firm focus on progressing the Barossa FPSO per plan and delivering high operational uptime on our core assets.”
The contractor’s remaining FPSO fleet continued to deliver stable uptime in the first quarter with a weighted average fleet uptime of 98.6% with uptime being impacted by a shutdown on the Sendje Berge.
In tandem, work in the first quarter progressed on optimising the development plan for its Maromba field development offshore Brazil where the planned first oil has been revised to the second half of 2026.
As part of the project rescheduling, BW Energy and BW Offshore agreed to defer payments for the Polvo FPSO, BW Offshore said on Wednesday.
“The company will pay an instalment of $30 million in the fourth quarter of 2023 and the remaining $20 million of the agreed price in second quarter of 2024. BW Energy will compensate BW Offshore with interest during the period,” the company added.
The company made a net profit of $17.8 million for the three months ended 31 March. Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter of 2023 was $79 million, down from $104.9 million in the previous three months.
The contractor noted the reduction is largely due to a non-recurring reimbursement recorded in fourth quarter 2022 for expenses incurred under the limited notice to proceed (LNTP) with Shell for the Gato do Mato FPSO.
BW Offshore said it expects that the core units in the existing fleet will continue to generate significant cash flow in the time ahead supported by the $5.8 billion firm contract backlog at end of March 2023, including the Barossa contract.
The company added it is experiencing continued strong interest for infrastructure-type lease and operate FPSO projects, combined with continued access to equity and debt financing for field development initiatives with long-term production, low breakeven costs and low carbon emissions.
The contractor’s ongoing asset divestment programme for its non-core floaters is expected to be completed in 2023 in line with strategy, reducing the operational risks associated with the conventional units and strengthening the balance sheet.