FPSO group falls to nine month loss

Published 20.11.2009 15:22:29 by John Bradbury

Floating production group Aurelia Energy – the holding company for the Dutch Bluewater Group- slipped to a nine-month loss as some of its FPSOs came off contracts.

Net losses for the nine months to September were US $126 m, compared with a $21.m loss for the the same period last year.

Earnings (Ebitda) for the nine months to September were halved to$43.8 m from $92.3 m last year.

Aurelia said the figures were hit by a $5.2 m loss in the third quarter from its single point mooring operations, which it said was mainly due to additional provision for a lump sum construction project in Qatar which is now “substantially completed.” This resulted in a loss on earnings for the division for the nine months to September of $3.6 m.

And the FPSO division reported earnings of $66.6 m for the nine months, down from $114.7 m last year. Operations in FPSO division were hit by effects from two UK North Sea vessels, the Uisge Gorm and the Glas Dowr, which have been laid up since the start of the year, and the FPSO Munin ceased its production contract in July.

“All three vessels are currently being re-marketed,” the Bluewater group said today, resulting in significant tendering costs for the third quarter of $7.5 m, and lay up costs for the three vessels amounted to £14.1 m in the nine months to September.

Also earnings in the year have been further hit by repair and maintenance costs for the Haewene Brim FPSO and lower bareboat charter income for the shuttle tanker Hanne Knutsen.

On the plus side the group noted that the Aoka Mizu FPSO completed commissioning in August and produced first oil, which will generate revenue to the end of the year and beyond. Aoka Mizu is operating on Nexen's Ettrick field development in the UK sector of the North Sea.

Aurelia said is has already instigated a cost-saving plan which has included ending its engineering activity in Kuala Lumpur, which was done it says “...in reaction to the reduced medium term outlook.” And: “In order to maximize engineering efficiencies, and in order to limit overhead costs, the company decided to regroup its core competencies in one centre of excellence in the Netherlands, and close down the Kuala Lumpur office.”

Further more Aurelia said it is developing a “company wide restructuring plan” to significantly reduce costs and improve profitability.

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