BW Offshore is proactively taking steps to minimise risk of business interruptions due to the spread of Covid-19 coronavirus and is adhering to local public health advisory across all locations. Commercial uptime on all operating FPSOs continue to be close to 100% to date in 2020.
Prioritising people, operations and partners
The health and safety of employees and their families and ensuring continued safe offshore operations in cooperation with clients are the top priorities for BW Offshore. Restrictions have been introduced on international travel combined with extensive use of home office and video-meetings to reduce people gatherings and minimise risk of spreading the virus.
BW Offshore has established a task force that has initiated offshore business continuity plans for each FPSO focused on;
Optimising manning to sustain safe operations in the medium term
Retaining offshore crew, including rotations, in country to ensure uninterrupted operations irrespective of international travel bans
Medical, quarantine and medevac protocols
Social distancing and enhanced cleaning protocols
Stocking of provisions, consumables and essential spares to prevent being affected by potential supply chain disruptions
These measures are supported by a similar framework activated across all onshore offices.
“Safeguarding our people, assets, operations and clients is our main priority. We have appointed a Covid-19 task force to continuously monitor the situation and assist in operational adjustments as the situation evolves,” said Marco Beenen, the CEO of BW Offshore. “At the same time, we continue to develop our business and execute on our long-term strategy which over time has proven resilient amid market turmoil and oil price volatility.”
On 18 March, BW Offshore announced a five-year contract with additional options for the lease and operation of the FPSO BW Pioneer in the US Gulf of Mexico. The firm period commences in direct continuation of the current contract and lasts until March 2025.
“We are pleased to sign this extension reflecting a continuation of work at similar terms with future upside potential related to additional production,” said Marco Beenen. “It adds approximately USD 350 million of EBITDA over the firm five-year period and long-term earnings visibility, which combined with our strong balance sheet and available liquidity, forms a strong foundation for the future.”
Solid financial position
BW Offshore is continuously evaluating current developments and has decided to defer approximately USD 60 million of planned capital expenditures related to the inactive fleet to 2021.
In recent years, BW Offshore has substantially reduced leverage and in 2019 the Company refinanced its main loan facility and bond portfolio to extend instalments and maturities. Year-end 2019 reported net debt was USD 997 million, equal to 1.8 times reported full-year FPSO EBITDA of USD 544 million.
As at end-February 2020, USD 325 million was drawn under the main corporate facility and remaining debt instalments for 2020 amounted to USD 97 million. Available liquidity was USD 418 million, including USD 183 million in cash after the January repayment of USD 141 million of NOK bonds called in December 2019. This excludes cash in BW Energy, in which BW Offshore holds a 38.8% stake post the January 2020 spin-off and listing.