Chevron Cancels Rosebank FPSO
Chevron has finally cancelled a $1.9bn contract awarded in 2013 to South Korea’s Hyundai for a floating production ship (FPSO) for its UK Rosebank oil and gas project. Project go-ahead was indefinitely deferred later that year for cost reasons.
In a December 14 statement, the US major said: “Chevron North Sea Limited can confirm that the agreement with Hyundai Heavy Industries (HHI) to provide the Rosebank Floating Production, Storage and Offloading (FPSO) vessel has been terminated with immediate effect.”
The West of Shetland Rosebank oil and gas project is operated by Chevron 40%, partnered by Canada’s Suncor 30%, OMV 20% and Denmark’s Dong 10%. Chevron’s website says that Rosebank’s design capacity is 100,000 b/d crude oil and 80mn ft3/d gas but, as at end-2015, proven reserves had not been recognised for the project. The OMV stake is included in an agreed sale of its UK assets to private equity firm Siccar Point, announced last month.
Chevron added: “The Rosebank project is continuing through Front End Engineering and Design (FEED). Chevron is working closely with its joint venture participants to further improve project value and decrease execution risk as we progress through FEED.” It declined to be drawn on what other options were being considered but insisted that Rosebank remains “an important part of Chevron’s UK portfolio.”
“Chevron continues to value HHI as an important member of its world-wide supply chain and looks forward to exploring future business opportunities with HHI in accordance with business needs,” it added.
The US major announced last week that 2017 will mark its fourth annual capex reduction in a row.
Chevron in 2009 contacted Sevan Marine to study using a cylindral platform for Rosebank production, before opting for a conventional FSPO from HHI. In August 2016, Sevan then said that a US major had engaged it for a feasibility study into whether its cylindrical hull could be used as a floating liquefaction platform – it did not cite a location. Exxon confirmed to NGW it was “not our study” but Chevron and ConocoPhillips declined to comment.
Mark Smedley