Teekay Offshore has canceled construction contracts for two newbuild cylindrical flotels with China’s Cosco shipyard.
The company said on Thursday in its second quarter 2016 results report it canceled the construction contracts for two units for maintenance and safety (UMS) and, as a result, incurred a $43.7 million write-down.
Teekay became the owner of these two flotels by acquiring Logitel Offshore, established in 2013 by Sevan Marine and CeFront Technology, in 2014.
Apart from these two units, whose delivery was previously delayed, the Chinese shipyard already built one flotel for Logitel, named Arendal Spirit. The unit, based on Sevan Marine’s cylindrical design, was delivered in February 2015 and is under a three-year contract with Brazilian oil company Petrobras.
During the second quarter of 2016, Teekay saw a decrease in cash flows partially due to off-hire related to gangway damage on the Arendal Spirit that occurred in April 2016. Following the replacement of the gangway, the unit returned to operations in early July 2016.
Offshore Energy Today Staff