A contract for Teekay Offshore Partners to provide FPSO Petrojarl Varg to Alpha Petroleum Resources has been terminated.
The contract was for the FPSO to operate at the Cheviot field on the UK continental shelf for seven years from 2021.
Part of the deal was for Alpha Petroleum to provide initial funding to cover life extension and upgrade costs for the FPSO at a Sembcorp yard in Singapore. According to Teekay, this condition has not been satisfied by the prescribed contractual deadline, and so the contract has now been terminated.
Chris Brett, president of Teekay Offshore Production, commented: “We have been very impressed with the creativity, competence and determination of the Alpha Petroleum team to develop the Cheviot field which remains, in our opinion, a well-developed opportunity and we wish the Alpha team all the best in their continued efforts to bring the field into production. From a Teekay Offshore perspective, we look forward to advancing the next project for the Petrojarl Varg, which could still include the Cheviot development under a revised financing model. The Varg FPSO has had a long history of reliable production on the Norwegian Continental Shelf and provides a flexible production solution for a wide range of future developments in the North Sea and beyond.”
Teekay is now pursuing alternative deployment opportunities for the Petrojarl Varg.