COSCO gives up on Octabuoy project

China’s COSCO Nantong shipyard has scrapped the construction of the unconventional Octabuoy offshore production platform as it was unable to find a buyer.

In 2008, the company secured a contract to build the platform’s hull and the topside for ATP Oil & Gas’ UK subsidiary. The U.S.-based ATP Oil & Gas in 2012 filed for bankruptcy.

That meant that the shipyard needed to find another buyer for the Moss Maritime-designed unit, which had originally been planned to be used for the development of the Cheviot field in the UK North Sea.

Petroleum Equity, a private equity firm focused on the upstream oil and gas market, last year bought ATP UK from its US parent company ATP Oil & Gas Corporation for $133 million.

On that occasion, Bernhard Schmidt, a Founding Partner at Petroleum Equity and former Head of E&P at Wintershall, said: “As part of the restructuring, the expensive and overdue Octabuoy development concept for the Cheviot field has been shelved.”

He added that the most likely development solution for Cheviot would be a conventional FPSO.

End of Octabuoy

In a statement issued today, COSCO said that while it has been making efforts to find a buyer for the Octabuoy and several potential buyers had previously expressed interest, COSCO Nantong has so far not entered into any agreement for the sale.

“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 specialized design of the Octabuoy and the substantive investment in the customized equipment that is required to continue the project.

“In light of the above, a decision has now been made by the management of COSCO Nantong to discontinue the project and this is expected to result in a one-off charge of approximately S$90 million (USD 72 million) for the Company for the financial year ended 31 December 2014,” COSCO explained.

Offshore Energy Today Staff

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