[ad_1]
Supplied / Stuff
The Umuroa FPSO, right, moored near the Tui oil field off the coast of Taranaki.
The Taranaki oil and gas industry has taken another hit with the company that services the Tui oil field going into liquidation, a flow from the collapse of Tamarind Taranaki.
Norway-based BW Offshore has put BWU, a wholly owned subsidiary that operates the floating production and offloading vessel (FPSO) Umuroa, into voluntary liquidation after incurring millions of dollars in unsustainable costs.
In a statement, BW Offshore CEO Marco Beenen said that BWU was liquidated to avoid additional costs, which amounted to $ 21 million (NZ $ 31.4 million) in 2020.
The action stems from the Tui field’s previous owners, Tamarind Taranaki, becoming insolvent in December 2019 after a failed drilling campaign.
Since then, BWU has continued to cover Umuroa’s maintenance costs at the site, but has not received any payment under its contract with Tamarind Taranaki for 12 months.
READ MORE:
* Taranaki firms do not guarantee work on cleaning Tui
* Plugging and dismantling of the Tui oil field is approaching
* Asking Taranaki companies to get the ‘lion’s share’ of lucrative oil and gas decommissioning work
* Tui oil field to be closed
In March 2020, the Government, through the Ministry of Business, Innovation and Employment, assumed the role of dismantling the field and disconnecting the Umuroa, whose cost is estimated at 155 million dollars.
Continued efforts by BWU to agree on the disconnect and cover the costs of remaining at the site until MBIE could begin decommissioning forced the liquidation, Beenen said.
“We have assumed responsibilities well 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 proceed with the disconnection of FPSO,” it said in the statement.
“We have not been able to reach an agreement with MBIE that provides a viable solution despite significant efforts on our part, which include offering to plan and execute the MBIE disconnection at cost and without benefit.
He said it was costing more than $ 1 million a month to keep the Umuroa FPSO in compliance with regulatory requirements and this cost accelerated to increase over time.
Supplied / Stuff
The company that owns Umuroa FPSO, above, has been put into voluntary liquidation after incurring costs of $ NZ31.4m in 2020.
“This is unsustainable for us as a company.”
The Umuroa, a converted tanker, is safely moored to the Tui field, and BW Offshore will work with the liquidators to ensure the safety of the crew and continued care and respect for the environment, the company said.
The Umuroa no longer contained crude oil in the tanks and has a minimal amount of fuel on board to ensure a safe transition to the liquidators, he said.
BW staff will be deployed within the company, while 16 contract crews will be paid in full. No personnel will suffer losses from the voluntary liquidation, the company said.
As a result of the voluntary liquidation, the liquidators will take control of all the assets and property of the company and will subsequently apply them in satisfaction of BWU’s responsibilities to its creditors, Beenen said.
“BW Offshore will no longer have control over FPSO Umuroa.
“As a result, the remaining net book value of $ 21 million (NZ $ 31.4 million) on the unit is expected to drop to zero.”
A spokesperson for MBIE said that while BW Offshore’s announcement was unexpected, the government would work through the implications of the liquidation while continuing to plan and prepare for the decommissioning.
