Offshore vessel owners World Wide Supply, Ultrapetrol and Siem Offshore all reported Monday receiving notification for the early termination of charter contracts with Brazilian oil giant Petrobras.
Perhaps the hardest hit was Norwegian platform supply vessel owner World Wide Supply (WWS), who reported Monday receiving notice of early termination regarding two of the four charter contracts it holds with Petrobras running through June 2018. WWS says the vessels impacted are the World Opal and World Peridot platform supply vessels.
With a fleet of just six identical modern PSVs, the cancellations leave WWS with only two working vessels; World Saphire and World Emerald, both of which remain under contract with Petrobras. WWS’s two other vessels have been in lay up since September 1, 2015 as a result of weak demand in the UK North Sea market. To make matters worse, WWS is reporting that Petrobras is refusing to pay an accrued US $3 million “block-period” fee owed to the company.
Next on the chopping block Monday was Ultrapetrol (Bahamas) Limited, who also reported receiving notification from Petrobras for the early termination of contracts for three of its non-Brazilian flag platform supply vessels – the UP Amber, UP Pearl, and UP Esmeralda.
Ultrapetrol’s Offshore Supply Business continues to operate six PSVs with Petrobras under Brazilian flag or with Brazilian Special Registries (REB). The company also has the non-Brazilian flagged RSV UP Coral that recently commenced a six-year contract to provide subsea support services to Petrobras. In addition, two laid-up North Sea vessels belonging to Ultraptrol, UP Agate and UP Jasper, are currently participating in tenders to enter service with Petrobras as an RSV subsea support vessel and a PSV with REB Rights, respectively.
Last up is Siem Offshore. The Norwegian owner reported Monday that it has received notice of early termination for the vessel Siem Carrier because Petrobras failed to obtain an operating license for the vessel. A termination fee is not applicable to Petrobras as the vessel was blocked by local tonnage under the contract terms, Siem Offshore reported.
In June, Petrobras announced that it slashed its long-term spending plan by 41% billion to $130.3 billion in the 2015-2019 period in an effort to decrease its debt and pull the company out of a giant corruption scandal.