Total renews FSO service contract for Al-Shaheen field

  • Business & Finance

A joint venture between Euronav NV and International Seaways has been awarded a five-year deal for the service of the FSO Africa and FSO Asia on the Al-Shaheen field, off Qatar, by Total and Qatar Petroleum. 

The two floating storage and offloading units, FSO Africa and FSO Asia, are double-hulled FSOs owned by joint venture companies in which Overseas Shipholding Group, Inc. and Euronav each have a 50% interest.

The JV said on Thursday that this contract is in direct continuation of the current contractual service.

The letter of award was received from North Oil Company, the future operator of the Al-Shaheen oil field. North Oil Company, which is 70% owned by Qatar Petroleum and 30% by Total, was selected to operate the Al-Shaheen field after Maersk Oil lost the contract in June this year.

The contract award to Euronav and International Seaways JV is subject to successful negotiation and documentation of the services contracts.

The intent is that the new contracts for these custom-made 3 million barrels capacity units that have been serving the Al-Shaheen field without interruption since 2010 will have a duration of five years starting at the expiry of the existing contracts with Maersk Oil Qatar. The existing contracts will remain in force until expiry in the third quarter of 2017.

If negotiations and documentation are successfully concluded, the new contracts are expected over their full duration to generate revenues for the joint venture in excess of $360 million, excluding reimbursement for agreed operating expenses which will be dealt with on an open book basis, the JV said.

Further, the JV added, the signing of definitive services contracts remain subject to the resolution of substantive business terms and conditions and no assurance can be given that such resolution will be achieved.

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