BW Offshore, an Oslo-based provider of floating production systems to the international oil and gas industry, has received a notice of termination for the FPSO BW Athena contract from Ithaca Energy. The FPSO is producing oil at Ithaca’s Athena field in the UK North Sea.
In a statement this morning, BW Offshore has said it has agreed a revised contract structure with Ithaca Energy to continue production on the Athena field beyond expiry of the firm period on a revised compensation scheme. This involves advanced payment of an FPSO demobilization fee and sharing of positive cashflow from the field. Both parties have the right to terminate the revised lease on a 60-day notice period.
In a separate statement, Ithaca has shed more light on the terms of the deal, confirming the Athena co-venturers will make advanced payment of an FPSO demobilization fee and from the end of the primary contract term in June 2015, the vessel day rate will no longer apply and the co-venturers and BW Offshore will instead share the net cashflow generated from the field.
“Execution of the revised FPSO contract is clearly a positive step for extending the life of the Athena field and is reflective of the pragmatic approach being taken by many North Sea suppliers to realign cost structures to the current low oil price environment. The Athena field accounts for less than 8% of Ithaca’s forecast 2015 production and no year-end reserves have been assigned to the field interest,” BW Offshore said in a statement.
The Athena field is situated in block 14/18b in the Outer Moray Firth area of the UKCS, lying approximately 18 kilometers west of the Claymore and Scapa fields and the associated production facilities.
Ithaca currently holds a 22.5% interest in the block 14/18b. The field has been evaluated by Sproule Associates to contain 2P reserves (gross) of 24.4 million barrels of oil.
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Offshore Energy Today Staff