Petrobras has cancelled its long-term charter of a Siem Offshore’s platform supply vessel (PSV) Siem Carrier, after the vessel failed to gain the certification needed to grant it a licence to operate in Brazilian waters.
“[A] Termination fee is not applicable to Petrobras as the vessel was blocked by local tonnage, according to contract terms,” Siem Offshore said in a filing today.
Petrobras chartered the Norway-flagged Siem Carrier in May 2013 for a firm period of four years. The contract had a gross value of $50m, and included the option to extend by a further four years.
In Brazil, vessels must have their Certification of Charter Authorisation (CAA) and Registration Certificate of Temporary Foreign Vessels (AIT) certificates renewed annually in order to operate in Brazilian waters under a foreign flag.
Under Brazilian law, when a foreign-flagged vessel comes to renew its CAA and AIT certificates, the renewal can be ‘blocked’ by an unemployed Brazil-flagged ship that is built to the same specification, which can take over the foreign vessel’s employment contract.
Today it was confirmed Petrobras has prematurely terminated its timecharter of two offshore supply vessels owned by Norway’s World Wide Supply (WWS) for the same reason.
Interesting article, thanks!