Petrobras’ charter for BW Offshore’s FPSO expires with no firm plan in sight

The charter agreement and services agreement for the BW Offshore-owned FPSO Cidade de São Mateus with Brazilian oil major Petrobras has ended.

BW Offshore said on Monday that the contracts for the FPSO had reached their final terms on Sunday, 29 March 2020.

The FPSO Cidade de São Mateus worked on the Camarupim field from 2009 until 2015. In February 2015, the FPSO was involved in a gas explosion with fatal consequences.

At the time of the accident, the unit was operated for Petrobras by BW Offshore on the Camarupim and Camarupim Norte fields in Espirito Santo approximately 120 km from the coast in southeastern Brazil. Nine of the 74 persons on-board lost their lives in the accident.

Due to delays in the approval in Brazil, the process to tow the damaged FPSO after the accident from the offshore field to shore took over a year. The FPSO has been in lay-up in Singapore ever since.

BW signed an agreement with its insurers, with an effective date of 22 December 2016, for an early repair cost settlement of $250 million during January 2017. The amount was received in 2017.

In March 2018, Petrobras exercised a one-year extension of the contract for the FPSO Cidade de São Mateus with the two companies still working towards finalizing a firm plan for the FPSO while the unit remained in lay-up. The dialogue with Petrobras continued in 2019.

In the update on Monday, BW has not revealed whether any firm plan for the FPSO has been agreed with Petrobras.