FPSO leasing company BW Offshore has decided to record an impairment to the book value of the FPSOs BW Athena, Espoir Ivoirien, Sendje Berge, Petróleo Nautipa and Umuroa amounting to $66.6 million in the fourth quarter of 2021 as well as $23.8 million for the loss on the sale of the Joko Tole FPSO.
"The impairment reflects reduced expectation of longer term extensions to current contracts for the listed vessels that are still in operation, as well as limited potential for future redeployment for the same units and for the abovementioned FPSOs that are in lay-up," BW Offshore explained.
In addition, the company will record an impairment of $23.8 million related to the previously announced sale of Joko Tole and associated loss from the transaction. BW Offshore said it would further reverse a previous impairment of USD 4.2 million related to the sale of Cidade de São Vicente, the company said.
To remind, BW Offshore last week said that it had signed an agreement with Priya Blue Industries yard in India to recycle the Cidade de São Vicente FPSO in compliance with Hong Kong Convention. The convention, adopted in 2009, is aimed at ensuring that ships when being recycled after reaching the end of their operational lives, do not pose any unnecessary risks to human health, safety, and the environment.
The FPSO, delivered in the year when the convention was adopted, was sold to the yard for $12.8 million in cash.
Also, BW Offshore said Monday it would record a gain of USD 14.9 million from the sale of shares in BW Energy in October 2021.
According to information found on BW Offshore's website, out of the six FPSO's BW Offshore has decided the impairment on, two are candidates for recycling: the BW Athena which is in cold lay-up in the UK, and Umuroa, in cold lay-up in Indonesia.