China’s Cosco has finally called time on its efforts to sell off the unwanted Octabuoy semisubmersible platform it had been well on the way towards completing for ATP Oil & Gas UK, with the fate of the structure as it is currently undecided.
The yard said the specialised design of the floating production platform had ultimately also counted against it in the yard’s desperate bid to offload it and recoup some cash.
The Board of Directors of Cosco Corporation (Singapore) Ltd, the parent company of the Cosco Nantong shipyard, confirmed that despite several potential buyers previously expressing interest during the second half of 2014, no agreement for sale has been reached so far.
“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 specialised design of the Octabuoy, and the substantive investment in the customised 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 Sing $90 million (US $70 million) for the company for the financial year ended 31 December, 2014.”
It is not yet clear whether Cosco will continue to hold onto the Moss Maritime-designed structure in the hope that a deal does eventually arise – the facility may well be eventually snapped up at a bargain basement price by an investor with a long-term outlook prepared to hang onto it until oil prices rise again – or whether it will simply scrap it and reuse the materials on other projects.
Earlier in 2014 the hull for the Octabuoy hull was confirmed as being 96% complete, while the topsides were 48% complete, so much of the core work has been done. But as of mid-July last year ATP UK went into company voluntary arrangement, with Cosco offering the structure for sale from then on and not carrying out any further construction work.
However it revealed in its latest decision that on 9 December it received a notice from the CVA managers of ATP UK acknowledging Cosco Nantong’s total debt claim and on 11 December it received an initial part payment of approximately US $5 million. It is not yet clear how much more will be forthcoming, hence Cosco’s warning that it will take the one-off hit of $70 million related to the project.
ATP had in 2008 ordered the platform to be built for its 200 MMbbl Cheviot oil field in the UK North Sea east of Shetland, but ATP UK’s new owners Petroleum Equity last year dumped this plan after saying delays and increased costs on the project no longer made it a viable development option.