A BW Offshore FPSO is stuck in operational and legal limbo in New Zealand after its charterer went bust.
The contract for the Umuroa was cancelled early by Tamarind Taranaki Limited (TTL), the operator of the Tui field, in October, with the company declining to extend the deal past the 31 December expiry.
BWO expected to shift the unit to Singapore for redeployment elsewhere by the end of March.
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 TTL, however, which is in no position to carry out the work.
In March, the EPA imposed notices to prevent BW Offshore from disconnecting the risers itself.
Court battles
BW Offshore challenged this in the Environment Court and the court lifted the ban.
But the EPA in turn appealed this decision and on 6 April the High Court of New Zealand decided that the notices should remain in place.
"The company is taking advice on whether to appeal the recent High Court decision which contains certain inaccurate statements and gives the impression that BW Offshore was in a partnership or joint venture with TTL. This is not the case," BWO said.
BW Offshore was a service contractor to TTL and has no ownership interest in the field, it added.
"Due to uncertainty whether BW Offshore may disconnect using the 2017 ruling, combined with the Covid-19 situation and the onset of the southern hemisphere winter, the company has decided to plan a for lay-up of the unit on the field until further clarification can be received from authorities."
Much of the $20m demobilisation cost has already been incurred as preparatory work with support vessels.
BWO is still trying to find a solution with the New Zealand government.
In October, it said it was pursuing Tamarind for up to $23m after the deal was scrapped.
The potential total Ebitda exposure for both past and future hire could be up to $23m by the end of 2019, BWO said.
"BWO will seek to recover all outstanding hire from Tamarind Resources and its parent company under the provisions of the existing contracts," it added at the time.
Tamarind did not comment.
For the third quarter, BWO will book a provision of $10m due to the loss of the charter.
