Maersk cancels Qatar FSO contract

Maersk Oil Qatar has issued a termination notice concerning a services contract for the FSO Africa.

Offshore staff

ANTWERP -- Maersk Oil Qatar has issued a termination notice concerning a services contract for the FSO Africa.

The floating storage and offloading vessel was one of two the company had contracted from TI Africa for its ongoing Al Shaheen oil field development in the Persian Gulf.

Both vessels were delayed beyond their contracted delivery dates. The FSO Asia was successfully hooked up at Al Shaheen on Jan. 5, where it is currently undergoing a 120-day commissioning period.

FSO Africa was due to be delivered on Jan. 19, but according to TI partner Euronav, mechanical completion work meant it would not be ready for several more weeks.

Under the contractual arrangement, Maersk Oil Qatar had the right to terminate one or both FSO service contracts from midnight Jan. 19. Euronav and its partner in TI Africa, OSG, are contesting the termination notice, claiming that the vessels both remain critical to the multi-billion dollar expansion program for Al Shaheen. In addition to oil storage and offloading, they point out, the vessels will also provide accommodation, transport and storage space for other facilities on the field.

In the meantime, TI Africa intends to persevere with its conversion of the FSO Africa. In light of the currently buoyant market for oilfield services, Euronav claims the vessel would have little difficulty finding employment either at Al Shaheen or on numerous other offshore development projects worldwide.

01/22/2010

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