Teekay Offshore: Petrojarl Varg FPSO charter decision in 2Q

Teekay Offshore, a provider of floating production units for the offshore industry, has said that a decision on its potential charter of Petrojarl Varg FPSO might come in the second quarter of 2019.

 The company in late 2018 entered into a conditional 7-year charter agreement for its Petrojarl Varg unit to be deployed to the Cheviot oil field, operated by Alpha Petroleum.

Cheviot, fully-operated by Alpha Petroleum, has been described by the operator as one of the largest undeveloped oil fields in the UK sector of the North Sea.

However, Alpha Petroleum has been delaying the sanction of the Cheviot development. Alpha Petroleum first missed the expected 3Q 2017 date for the sanction, then it in October 2018 said it expected to achieve sanction for the Cheviot development in Q4 2018. This date was missed too, presumably due to financing issues.

In an update on Tuesday, Teekay Offshore’s CEO Ingvild Sæther said: “We continue to work closely with Alpha Petroleum in their attempt to complete the financing of the development of the U.K. Cheviot field which remains a pre-condition to effect the new charter contract for the redeployment of the Petrojarl Varg FPSO. We expect a decision to be made in the second quarter of 2019.”

Petrojarl Varg is a ship-shaped, turret moored, FPSO delivered in 1998. The FPSO has a storage capacity of 470,000 bbls and accommodation for 77 persons. The Teekay Petrojarl Varg has been laid up since Repsol decided to stop production at the Varg field in Norway in 2016.

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