The vessels are scheduled to be delivered between the end of 2013 and mid 2014.
Presently, the vessels are under construction in the Korean shipyard and are expected to be installed to sustain BP's West of Shetland and Norwegian activities. The PSVs are estimated to cost approximately $205 million.
Built on the rationale of providing long-term support to BP's North Sea operations, these vessels will be equipped to offer the competence the company needs to deliver its strategy more proficiently and safely.
BP's fleet will be augmented to include vessels capable of extracting additional oil from mature reservoirs. This is a key element for a company having major operations in the North Sea. The other features built in the vessels are oil spill response capability as well as special tanks to carry fluids required for enhanced oil recovery (EOR) schemes.
Per the agreement, BP Shipping has hired Hyundai for the construction of the vessels. Subsequently, BP Shipping will charter the PSVs to BP Exploration Operating Company for a period of 15 years.
BP will also be generating employment for about 65 natives in the region of Aberdeen, since the vessels will be placed and maintained in the region. This investment is also vital as it will provide BP various benefits commercially and in terms of security.
BP has made huge investment plans for the North Sea region. The consent to move ahead with the Clair Ridge project at the end of 2011, along with its partners ConocoPhillips, Chevron Corporation and Royal Dutch Shell, has further helped BP to maintain a steady flow of investments in the region.
BP holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. For the long term, we maintain our Neutral recommendation.