BW Offshore has signed an agreement with its insurers for an early repair cost settlement for an FPSO blast off Brazil in February 2015.
The agreed settlement for the incident involving the Cidade de São Mateus is about $250m, with settlement expected during the first quarter of 2017.
BW Offshore disclosed Wednesday that the insurance settlement will be recorded in the fourth quarter of 2016 financial statements.
“The 2015 financial statements have already included a total of $160m in estimated preliminary insurance revenue for repair of the unit and an equal amount as impairment of the net book value of the asset,” the company said.
“The fourth quarter financial statements will reflect about $90m recorded as insurance revenues, which will bring the total recorded amount for insurance revenues for repair of the FPSO Cidade de Sao Mateus to about $250m.”
BW Offshore said that as a consequence of concluding the repair-evaluation and signing the agreement with the insurers, it has deemed it necessary to record a further impairment to the net book value of the FPSO.
BW Offshore said it is estimated that this impairment will be about $140m, subject to a final evaluation before the fourth quarter 2016 report is approved.
The FPSO Cidade de Sao Mateus is currently in lay-up, but it has reportedly not been possible to establish a firm plan for when the unit will return to the field before final discussions are concluded and agreed with the client.
On 11 February 2015 at around 12:50 local Brazilian time, an explosion occurred onboard the FPSO Cidade de Sao Mateus.
The unit is operated for Petrobras by BW Offshore on the Camarupim and Camarupim Norte fields in Espirito Santo littoral about 120 km from the coast.
