Red ink for Bluewater

Image: Bluewater
FPSO Munin; Image: Bluewater

Bluewater, a service provider and operator of floating production storage and offloading units (FPSOs), has posted a loss of $99 million for the fourth quarter of 2015, compared to a profit of $2.8 million in 4Q 2014.

According to the company’s 4Q results report, the major fall of the oil price since mid-2014 has had negative consequences for the company’s business performance and financial outlook.

The lower oil prices coupled with depleting field reservoirs have in 2015 led to discussions with the company’s FPSO clients about the sustainability of continued economic production, which resulted in agreed reductions of Bluewater’s lease revenues, the company explained.

Additionally, the contract for the FPSO Glas Dowr producing from the Kitan field, in the Timor Sea, for the Italian oil company Eni was terminated for convenience and the FPSO ceased operations on December 14, 2015. The disconnection project for the FPSO Glas Dowr started in February and is conducted by Technip and Australia’s Neptune was contracted to provide air diving services.

With the continued lower oil price, there is increased uncertainty around the timing of award for new contracts to redeploy the FPSOs, the operator said. The adverse market circumstances have also had a negative timing effect on the future development of the single point mooring (SPM) order backlog.

The fourth quarter 2015 EBITDA for the FPSO division was $47.7 million, resulting in an EBITDA of $169.9 for the FPSO division for the year 2015 compared to $150.1 million EBITDA for the year 2014. The $19.8 million increase in EBITDA compared to the year 2014 was mainly driven by a $63.7 million increase in EBITDA for the FPSO Haewene Brim.

Bluewater said that this increase in EBITDA was due to $67.6 million increase in amortization of deferred income in relation to the capitalized Brynhild project costs, partly offset by increased maintenance costs and reduced income due to constraints in production levels during the year 2015.

Offshore Energy Today Staff

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