SBM Offshore, Repsol set to split Yme insurance cash

The Pioneering Spirit getting ready to remove the Yme platform in August 2016. (Image: Allseas)

SBM Offshore has executed a settlement contract with an extended group of primary layer insurers for the Yme platform that was recently removed from the Norwegian sector of the North Sea amid structural stability concerns.

The execution follows SBM’s announcement in July, regarding the reaching of Heads of Terms related to the settlement of SBM’s claims related to the troubled Yme platform SBM Offshore had delivered to Talisman in 2011, which then had to be removed a few years later, without producing oil.

In July, SBM said it had provisionally reached an agreement with 73.6% of the insurers.

However, the final settlement, announced on Friday, includes one additional primary layer insurer. As a result, SBM Offshore has entered into a binding settlement with 83,6% of the $500 million primary insurance layer against a cash payment of $281 million in full and final settlement of its claim against participating insurers.

Upon receipt, the settlement cash will be used first to reimburse legal fees and other claim related expenses incurred to date. The balance of the settlement cash will then be shared equally between SBM Offshore and Repsol in accordance with the terms of their Settlement Agreement of March 11, 2013 which concluded the Yme project.

“SBM Offshore continues to pursue its claim against all remaining insurers including the two excess layers, the trial of which is scheduled to commence October 2018. Further details of this settlement and the claim are confidential,” the company said.

 

Background

SBM Offshore had delivered the Yme Mopustor platform to Talisman (bought by Repsol in 2015) to produce oil from the Yme field in the Norwegian sector of the North Sea.

However, Talisman then identified structural issues with the platform, and evacuated the unit in mid-2012 saying there was a chance the platform could collapse.

The two companies then in March 2013 reached a decision to terminate the YME MOPUstor project, including scrapping the existing above surface structure, and ending all joint activity for an agreed cost. As part of the deal SBM Offshore agreed to pay a settlement fee of $470 million.

It was also agreed that the 14,000 tonne offshore structure and equipment would be dismantled and recycled by Veolia at Lutelandet.

On August 22. 2016, Allseas’ giant single-lift installation/decommissioning and pipelay vessel “Pioneering Spirit” removed the Yme offshore platform in a single lift.

The vessel used its 59 meters wide slot between bows to float in around the Yme platform and then lifted off the topside weighing more 13.000 tons in a single piece.

Offshore Energy Today Staff

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