BW Offshore

Q1 2015 - Interim consolidated financial information - Seite 2

OPERATIONS
BW Offshore operates 17 units. The owned fleet consists of 14 FPSOs and one FSO. Average uptime during the first quarter was 94.4% (99.8%).  The lower uptime was caused by the off hire of FPSO Cidade de São Mateus.

The Company operates the FPSO Peregrino for Statoil and Sinochem on the Peregrino oil field offshore Brazil.

The Company also operates the FPSO P-63 owned by Petrobras and Chevron on the Papa Terra field offshore Brazil for three years in a joint venture with Queiroz Galvão Óleo e Gás S.A. ('QGOG'). The operation started in November 2013.

On 11 February 2015, there was a gas explosion onboard the FPSO Cidade de São Mateus, operating on the Camarupim and Camarupim Norte fields for Petrobras in Espirito Santo Littoral. Production was stopped and the unit has been shut down since the accident. The accident resulted in nine fatalities and 26 crew needing medical attention of a total crew of 74. The joint investigation with Petrobras was started immediately after the accident. The investigation was completed by end of April and signed by both companies. BW Offshore will communicate findings and learnings from the accident to the stakeholders in the industry.

In parallel with the investigation damages to and necessary repair of the unit has been undertaken and is still ongoing. The first phase of the operation has been to stabilise the unit, free process and subsea systems of hydrocarbons, empty the unit of cargo and disconnect the unit for transport to a yard for repairs. The cost of repairs are still being assessed together with impact from impairment to be taken for damages incurred.

BW Offshore carries insurance cover on a fleet wide basis, for its crew and support staff, pollution and clean up and any damage to vessels. In addition, the FPSO Cidade de São Mateus is also covered by a loss of hire insurance. The accident and its consequences will to a large extent be covered by these policies and BW Offshore is working closely with insurers and their loss adjusters in the recovery operations.

In the quarter, BW Offshore received a notice of termination for the FPSO BW Athena contract from Ithaca Energy. BW Offshore and Ithaca Energy (on behalf of the Athena-field co-venturers) have agreed a revised contract structure to continue production on the Athena field beyond expiry of the firm period on a revised compensation scheme, involving advanced payment of an FPSO demobilisation fee and sharing of positive cash-flow from the field. Both parties have the right to terminate on a 60-day notice period.