Spanish oil major Repsol has reportedly asked for a permission from the authorities to plug eight wells and shut down the Varg field, located in the Norwegian sector of the North Sea.
Repsol is the operator of the field with 65% interest and the partners are Petoro with 30%, and Det norske oljeselskap with 5% interest.
The field is developed at a depth of 84 meters with a wellhead platform, Varg A, and a production ship, Teekay’s Petrojarl Varg FPSO, with integrated oil storage. These are linked together with a 1200-metre production and injection pipeline and a control umbilical. The oil is exported via shuttle tankers. The production started in December 1998.
According to Teekay’s spokesperson, as Repsol has given Teekay notice of termination of the Varg contract with effect from August 1, 2015, Petrojarl Varg is now scheduled to leave the field by August 1, 2016.
“At the moment it looks like the vessel will go into layup pending redeployment on another field,” the spokesperson added.
As for the reason for shutting down the field, the news website said that the field was no longer considered profitable.
The news website also claims that the contract with Teekay for the FPSO Petrojarl Varg was cancelled back in November 2015. To remind, only several months earlier, in August 2015, Teekay and Talisman, now owned by Repsol, inked a three-year contract extension for the Varg FPSO, that was supposed to last until June 30, 2019.
Regarding further employment options for the FPSO Varg, the spokesperson for Teekay said: “Although Teekay continues to work actively on a number of options for redeployment of the Varg FPSO both inside and outside of Norway, it has become necessary to look at our offshore manning levels.
“Consequently, a number of our colleagues working offshore on our North Sea installations will have to leave us. It is always sad to see good colleagues go, but unfortunately we have to adapt our crewing levels to these new circumstances.”
“The crews have been informed and we are evaluating next steps. Teekay is working closely with employee representatives and the relevant trade unions in this process,” the spokesperson added.
Petrojarl Varg is a ship-shaped, turret moored, FPSO delivered in 1998. The FPSO has a storage capacity of 470,000 bbls and accommodation for 77 persons.
In an e-mail to Offshore Energy Today, Repsol confirmed that the FPSO contract was terminated.
Repsol’s spokesperson added: “Reserves produced exceed three times the approved PDO reserves. However, the field is currently uneconomical, and will move into decommissioning. The planned sail away date for the FPSO is August 1st 2016.”
This is not good. wonder what breakup fee is?
Repsol has applied to the authorities for permission to shut down its Varg field in the North Sea off Norway, having reportedly terminated its contract for the field’s floating production vessel.
probably short covering. whoever took that big short position may not have anticipated a collapse in the market and economy. the collapse have provided flight to safety for bgs. even with expected lumpy quarter the short is not playing out do to market. or maybe they have got financing other than shares for green giant deal.
this site is only yahoo product i use. I am slowing moving away towards seeking alpha because of constant spam they cant handle. message boards only good part of finance. i wouldnt touch it. i would only buy bolt on pieces that they need when a breakup happens to merge with aol.
it allows a big investor to buy in without driving up the price on suck a thinly traded stock. yes it will dilute but they are paying down debt
risk on...when bulls take over sleepy stocks like food, telecoms and utilities dont fare well. When market tanks again they come back to the safety trade.
NAO Power is off contract they have been trading spot.
NAO fighter and prosper are not listed and currently en route to fouties field makes me think options where exercised.
that would be great news. reduce cash burn as we take delivery of the two new ships. what service are you seeing those numbers?
yes somewhat the buyback is not enough to move stock as apparent by last quarter. maybe they should sell a ship and use the money to really buyback shares.
probably delivery of NAO galaxy. its been at seatrial since october has to be ready. maybe they are trying to get some term work for it.
i sold all my shares outside my retirement account needed the money for a house couldn't afford a pullback.long term still think is good play as shale goes under will need crude transport to usa from lower cost areas. NAT just booked there first cargo to Philly In years. even with glut was cheaper to import from nigeria.