Petroleo Brasileiro (Petrobras) sent a termination notice to Teekay Offshore for the Arendal Spirit charter contract last month, in which the company says it is disputing the grounds of the termination and is reviewing its legal options.

Teekay revealed the termination in its Q1 2017 results, in which the company said that its results for the quarter continued to be impacted by the non-payment of charter hire on the Arendal Spirit unit for maintenance and safety (UMS).

“We were recently notified by the charterer, Petrobras, of its termination of the charter contract on this unit. We are disputing the termination and are reviewing our legal options, while at the same time actively marketing the unit for alternative employment,” Ingvild Sæther, president and CEO of Teekay Offshore Group said.

In late-April 2017, Logitel Offshore Norway, a subsidiary of the Teekay partnership, was notified by the charterer, Petrobras, of its termination of the charter contract for the Arendal Spirit UMS. The partnership said that it is not only disputing the termination, it is reviewing its legal options, including its ability to collect amounts under the contract.

In other company news, Sæther said that Teekay will continue to be focused on project execution and as it took the delivery of its largest current project, the jointly-owned Libra floating production and storage offloading unit (FPSO), which arrived last week in Brazil.

Sæther said the FPSO is scheduled to start its 12-year charter contract with an international consortium, led by Petrobras, in late-June or early-July 2017.

“Our Gina Krog FSO project has experienced some delays and additional costs, with start-up currently scheduled in Q3 2017. We are finalizing discussions with Statoil on a bridging solution whereby Teekay Offshore will provide shuttle tanker offloading services in the interim to ensure no delays to Statoil’s start-up of the Gina Krog field,” Sæther said. “Lastly, as mentioned previously, we have also experienced delays and additional costs on the Petrojarl I FPSO upgrade and we are currently engaged in discussions with the charterer, shipyard and our lenders to deliver this unit into operation as soon as possible. We currently expect the FPSO to achieve first oil in early-2018.”

Source: www.oedigital.com