Teekay Buys in to the Big, Round, Floating Hotel Idea

logitel floating accommodation unit sevan
Rendering via Logitel

In conjunction with Teekay’s Q1 2014 earnings report today,the company announced its intent to acquire Logitel Offshore, a floating accommodations rig company owned by CeFront Technology AS.

CeFront Technology is a firm created in 2013 by Sevan Marine co-founder Arne Smedal and Kåre Syvertsen which is focused on developing opportunities for the use of Sevan’s unique cylindrical hull design outside of their core FPSO/FSO business segment.  The company partnered with Sevan in 2013 via a $51 million convertible loan to form Logitel Offshore.

As part of the acquisition, Teekay will acquire 100 percent of the shares in Logitel and Sevan will be paid $60 million by Teekay to relieve them of their exposure as “intervening party” under Logitel’s employment contract with Petrobras.  This contract will commence upon delivery in early 2015 of the first of two accommodation rigs currently under construction at COSCO (Nantong) Shipyard in China.  Logitel has six additional options for more rigs.  

Teekay CEO Peter Evensen commented on the acquisition:

“We continue to see strong growth fundamentals in the Brazil and North Sea offshore markets, which are our core markets. We believe that the combination of our strong operational platform and access to capital, with Logitel’s innovative accommodation rig design using Sevan’s cylindrical hull platform, will enable us to provide our customers with an attractive and reliable alternative in this growing segment.”

Mr. Evensen added, “Looking ahead, we expect that the acquisitions of Logitel and ALP, which diversify the Partnership’s investment portfolio and expand its presence in the offshore oil production value-chain, will further complement Teekay Offshore’s existing pipeline of growth projects, including the Remora HiLoad DP unit and two FSO conversion projects delivering between 2014 and 2017.

In addition, there are up to five FPSO units that may become available for purchase from our sponsor, Teekay Corporation, over the near to medium term. The largest of these, the Knarr FPSO newbuilding, remains on track for field installation and start-up in the fourth quarter of 2014.”

Teekay Offshore expects the proposed acquisition to be finalized in the third quarter of 2014.