BW Offshore FPSO goes to India for recycling

Norway’s FPSO operator BW Offshore has removed another floating production, storage, and offloading (FPSO) vessel from its fleet. This FPSO is set to be recycled at Baijnath Melaram ship recycling facility in India.

FPSO Petroleo Nautipa; Source: BW Offshore

The recycling of the FPSO Petróleo Nautipa, which was previously anticipated in late 2023, is expected to be done in compliance with the Hong Kong International Convention at Baijnath Melaram ship recycling facility, which is certified to ISO standards and has been issued with a statement of compliance by the ship classification society, Class NK.

The FPSO worked at the Etame field offshore Gabon for Vaalco Energy from its conversion in 2002 until the assignment was completed in 2022 and the unit was demobilized. During those 20 years, the contract was extended multiple times, from a deal that initially entailed two years firm plus three years of options.

In August 2022, Vaalco disclosed that it was working with the FPSO charterer regarding the timing for initiating the shutdown of production as well as the schedule for decommissioning and associated costs to ensure a smooth transition to an FSO for which the firm inked a binding letter of intent (LOI) in August 2021 with World Carrier Offshore Services.

Under the terms of the agreement, approved by the Etame joint owners, World Carrier was set to provide and operate the 2001-built Cap Diamant double-hull crude tanker as the FSO, which replaced the FPSO Petróleo Nautipa on the field. The vessel – renamed the Teli – was scheduled for deployment on the field in the third quarter of 2022.

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According to BW Offshore, the FPSO sale will free up around $9 million of liquidity. The firm intends to have its personnel continuously at the site during the recycling period, supplemented by additional competent personnel from a third party, to ensure health, safety, and environmental regulations are followed.

The Norwegian firm’s management personnel will organize on-site walkabouts and workforce engagement at the facility during the recycling process. While a ship recycling plan will be prepared and provided by the Indian facility in line with regulations, BW Offshore will pay a safe recycling bonus upon completion to further incentivize safe recycling, provided the agreed requirements for safe recycling are met.

Safe recycling is important, as confirmed by a report from April 2022 about a worker losing his life while scrapping an FPSO formerly owned by BW Offshore at Priya Blue Industries’ beaching yard in India. In response to the claim, BW Offshore said at the time that the incident “was unrelated to the ongoing recycling of former BW Offshore FPSOs at the yard.”

BW Offshore is working on expanding the niche oil and gas segment by redeploying existing FPSOs and divesting non-core assets. The company has already sold multiple FPSOs, including AboSendje BergeEspoir IvoirienBW AthenaBW OpportunityCidade de São Vicente, and BW Joko Tole

The company is also making new construction milestones for an FPSO destined to work on a gas field offshore Australia. With hull, topsides, and turret and mooring system construction 98%, 94%, and 96% complete, respectively, the FPSO BW Opal is progressing per the existing schedule for the first gas in the first half of 2025.