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FPSOcean can't survive trouble

FPSOcean can't survive trouble
Oil production shipowner FPSOcean has gone into bankruptcy after failing to attract a buyer to rescue it from financial trouble.

Oil production shipowner FPSOcean has gone into bankruptcy after failing to attract a buyer to rescue it from financial trouble.

Troubled oil production shipowner FPSOcean has gone into bankruptcy after failing to attract a buyer to rescue it from financial trouble.

The Norwegian company has become another victim of the global credit crunch and downturn in demand for oilfield services.

FPSOcean had ordered a floating production storage and offloading vessel from a Dubai shipyard but could not pay for the rest of the conversion work.

It was converting the 1981-built, 68,139 dwt, shuttle tanker Nordic Laurita at Drydocks World Dubai, but costs have risen to $375m.

It had to raise $95m more in equity finance to complete the work, but failed.

FPSOcean was unable to win a lease contract

FPSOcean was unable to win a lease contract for the vessel from an oil company and no white knight could be found to bail it out.

New management took over the company in August 2008 and tried to secure additional financing and a client for the FPSO Deep Producer I.

In November 2008, the new management halted work on a second FPSO conversion and sold the 1988-built, 97,172 dwt Semakau tanker to Greek buyers for $6.5m.

Last week, a potential investor decided not to proceed with an acquisition, forcing the company and all its subsidiaries into bankruptcy administration.

?Although the board and management believe a contract opportunity exists, the deep global economic downturn and resulting weaker oil prices delayed client decisions with respect to field development commitments and FPSO awards,? said FPSOcean in a report.

?The board has concluded that a near term contract with an oil major is unlikely, and recent discussions have not materialised in sufficient interim funding. There are no other means of resolving our immediate funding requirements. We are unable to meet payment obligations.?

The half converted FPSO in Dubai is the company"s only key asset and would be available to a rival shipowner or oil company. But rival companies are also finding it tough to finance their ongoing investment requirements.

www.TurkishMaritime.com.tr

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