Fear of sanctions exposure is said to have put a hold on the disposal of an expensive and troublesome asset, which was once the "jewel in the crown" of the former Fred Olsen Energy.
The standstill in efforts to sell the 51,400-gt ultra deepwater drillship Bolette Dolphin (built 2014) comes amid concerns over an increasing burden of due diligence for sellers in shipping transactions.
Norwegian business daily Finansavisen reported last week on an imminent sale of the drillship by a consortium of Scandinavian and US bankers and financial owners to Turkish Petroleum Corp, and subsequently reported that the investor group had developed cold feet.
At issue are European Union sanctions placed on two Turkish Petroleum directors last year in response to gas-field explorations in disputed waters off Cyprus.
The Bolette Dolphin, originally ordered for $615m from Hyundai Heavy Industries, was the most sophisticated ship in the fleet of Fred Olsen Energy, the predecessor of Dolphin Drilling.
Now laid up in a west Norwegian fjord, the rig has not worked since 2017 when its last charterer — Anadarko Petroleum — terminated a contract that was set to run into 2018.
In 2018, Fred Olsen Energy announced that it was in negotiations to sell the ship for $340m, but that deal never materialised. Today, the sophisticated vessel is valued at only $91m by VesselsValue.
The banks and investors who acquired it from bankrupt Dolphin, including Danske Bank, DNB, SEB, Swedbank and US-based distressed asset player Strategic Value Partners, hoped as recently as late January that they were on the verge of exiting the investment.
But by that time, the EU had decided to expand sanctions against Turkish Petroleum, beyond personal sanctions already in place against vice president Mehmet Ferruh Akalin and deputy director of exploration Ali Coscun Namoglu.
In August 2020, Turkey initially drew the ire of Brussels and EU member state Greece for conducting gas exploration in waters claimed by Cyprus and Greece.
In late December, an EU announcement accused Turkey of "[engaging]in unilateral actions and provocations and escalated its rhetoric against the EU, EU member states and European leaders" and said it was mullign further sanctions, which Turkey characterised as illegal.
Turkish Petroleum did not immediately respond to a request for comment.
