Norway's DOF Nets Four Petrobras Contracts Worth $110M

Norwegian subsea project and marine services provider DOF Subsea has been awarded four new contracts with Brazilian oil company Petrobras. 

DOF said Thursday that at least three vessels from the DOF fleet would be mobilized to perform flexible pipeline, risers and subsea equipment inspection in Campos Basin, Santos Basin, Marlin Field, and Espírito Santos Basin.

The contracts are worth more than USD 110 million with the planned start-up in the fourth quarter of 2020 and estimated to be performed within 550 days. 

Mons S Aase, CEO, DOF Subsea said, "I am very pleased for these awards securing utilization for our personnel and our assets and adding important backlog to the group."

DOF Subsea did not say which vessels exactly would be used to support Petrobras work. DOF subsea fleet comprises of 24 owned vessels, 3 chartered-in vessels, and 71 ROVs. 

During the 2nd quarter, the Group recognized impairment and depreciation of tangible assets of NOK 609 million, citing continued weak market for vessel services and the low demand visibility for the Group's services going forward.

It said last week that the impact of the covid-19 virus and the weak oil price had led to postponement and cancellation of offshore projects and tenders.

"The market conditions have become more challenging with an oversupply of services and subsea vessels. In addition, the demand for the Group’s services has decreased. The situation is resulting in cancellation and renegotiation of contracts, increased pressure on earnings and challenges with the utilization of both personnel and assets. Since the visibility of the demand for the Groups services is low, the medium to long term impact on the liquidity and solidity is difficult to address," DOF Subsea said in its quarterly presentation last week."

Despite these challenges, August has proven to be a fruitful month for the Norwegian offshore vessel owners. DOF Subsea on August 13 said it had won contracts for Skandi Acergy, Skandi Seven and Skandi Skansen vessels in Survey, Inspection, Maintenance & Repair, and Decommissioning segment, in the Atlantic Region.

Before that, on August 7, DOF Subsea revealed contract awards in APAC region, for IMR work with Chevron in Australia, a mooring replacement contract with an unnamed client in Southeast Asia.