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Home Fossil Energy Petrobras suspends charter payments for ‘Arendal Spirit’

Petrobras suspends charter payments for ‘Arendal Spirit’

February 23, 2017

Brazilian oil company Petrobras has suspended charter payments for the Arendal Spirit flotel, owned by Teekay Offshore Partners.

This was revealed by Teekay on Thursday in its financial report. Teekay said the Arendal Spirit experienced an operational incident relating to its dynamic-positioning system in November 2016.

As a result of the operational incident the charterer – Petrobras – initiated an operational review. The operational review is currently ongoing, and thus, Petrobras has suspended its charter hire payments since November 2016, Teekay said.

The Arendal Spirit owner said it had completed an investigation to identify the cause of the incidents and has implemented measures to correct the issue while negotiating with Petrobras to address its concerns and bring the unit back into operations.

This is not the first incident on the Arendal Spirit. Namely, in April 2016, during the process of lifting the gangway connecting the Arendal Spirit to an FPSO unit in a period of heavy waves, the gangway of the Arendal Spirit suffered extensive damage, resulting in the vessel being declared off-hire by its charterer, Petrobras.

From a financial standpoint, Teekay said its income from vessel operations and cash flow from vessel operations fell significantly due to Petrobras suspending payments for the Arendal Spirit since early-November 2016.

 

Financial results for 4Q 2016

 

Teekay Offshore said in its financial statement for the 4Q that revenues for the quarter were $275 million which is less $340 million seen in the same period in 2015.

Although hit by the lack of income from the Arendal Spirit, the company had an income of $56.5 million from vessel operations for the fourth quarter of 2016 which is a $10 million increase compared to 4Q 2015.

Overall, net income for the quarter nearly doubled in comparison to the fourth quarter of last year. In 4Q 2016 the company had a net income of $96 million in comparison to $47 million in 4Q 2015.

Offshore Energy Today Staff