Leased floating production firm SBM Offshore has agreed a $470million settlement deal with operator Talisman which will see the troubled Yme platform scrapped.
Completion of the mobile offshore production unit (MOPU) had suffered delays after concerns over its substructure were raised by operator Talisman last year.
Some 140 workers on Yme, which had been moored in the Norwegian North Sea, were evacuated as a safety precaution.
This morning SBM Offshore said it and Talisman Energy Norge AS, on behalf of itself and its joint venture partners, had now reached a decision to terminate to Yme MOPUstor project, including scrapping the above surface structure, and ending all jonit acticity for an agreed cost.
SBM Offshore said: "Following an extended period of opereational and execution delays, the deicision has been taken to remove the MOPU, which will subsequently be scrapped."
As part of the deal, SBM Offshore has paid an upfront settlement payment of $470million. Talisman will complete the work necessary to ensure the safe re-manning of Yme and will then remove the MOPU from the field. SBM Offshore will then manage the transportation and ultimate scrapping of the facility.
Ownership of the in situ subsea structure will be transferred from SBM OFfshore to the Yme license holders, as they assess alternative development concepts for the field.
"Delays to first production on the Yme project have been a great disappointment to the Yme joint venture partners," said Paul Warick, executive vicec-president Europe-Atlantic, Talisman Energy.
"Recent analysis has concluded that a new topsides solution is needed in order to develop the Yme field. The arrangement with SBM OFfshoe allows the Yme joint venture partners to continue to evaluate options for the Yme field."
Sietze Hepkema, member of the mnaagement board of SBM Offshore said: "Today we have resolved the legacy difficulties of Yme at an agreed cost, bringing an end to a period of significant uncertainty for the company.
"We are confident that with an FPSO-focused strategy, and our industry-leading technological skills, SBM Offshore can take full advantage of the strong long-term fundamentals in our markets."
The field is not currently producing – it had been due on stream in 2009 – but the development, sanctioned in 2007, has been beset by delays.
The Yme field, discovered in 1987, produced about 50million barrels of oil from 1996 to 2001 until low oil prices led to its closure by operator Statoil.
Talisman has a 60% stake in Yme, while Poland’s second-largest refiner Lotos has 20%, Norske ADEC holds 10% and Wintershall 10%.
In a separate statement SBM Offshore said: "SBM Offshore has already made a provision of US$200 million for estimated decommissioning costs in December 2012. Consequently, the Company will charge the difference of US$270 million to its first half results 2013. The
Company has paid the total settlement value of US$470 million to Talisman."