BW Offshore has lost control of a floating storage, production and offloading vessel that has been trapped in a legal row in New Zealand.
The Singapore company is cutting its losses by liquidating BW Umuroa (BWU), the company that owns the 118,100-dwt Umuroa (built 1981).
The FPSO remains on the Tui oilfield, west of North Island, following the bankruptcy of its charterer, field operator Tamarind Taranaki, in April.
The contract for the Umuroa was cancelled by the oil company last October.
BW Offshore, a unit of BW Group, expected to shift the unit to Singapore for redeployment elsewhere by the end of March.
Legal limbo
But to move the FPSO, risers need to be laid down on the seabed, under a 2017 ruling of the Environmental Protection Authority (EPA) of New Zealand.
The risers are the responsibility and property of Tamarind, which was in no position to carry out the work.
In March, the EPA imposed notices to prevent BW Offshore from disconnecting the risers itself.
BW Offshore challenged this in the Environment Court, which lifted the ban.
But the EPA in turn appealed against this decision and on 6 April the High Court of New Zealand decided that the notices should remain in place.
"The directors and shareholder of BWU have been left with no choice but to place the company into voluntary liquidation in order to prevent further accumulation of unsustainable losses," BW said.
Burning $1m per month
The company pledged to leave no contracted party or crew member out of pocket.
BW has offered to disconnect the FSPO at its own expense, but the government has refused.
"As it now stands, in addition to a significant accumulated cost, we are still incurring more than $1m per month to keep the FPSO Umuroa in compliance with regulatory requirements, and this cost is expected to increase as time progresses," said BW Offshore chief executive Marco Beenen.
"This is unsustainable for us as a company."
BW will work with the liquidators to ensure the safety of the crew, the integrity of the FPSO, and continued care and respect for the environment, the company added.
The Umuroa no longer contains crude and has the minimum amount of fuel on board to ensure a safe transition to the liquidators.
BW, which has spent more than $21m this year keeping the FPSO on site, said it is owed $31m in charter payments.
The FPSO's net book value of $21m will be written down to zero.
