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SBM Offshore has five hulls currently ordered under Fast4Ward programme

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Oilfield Technology,

SBM Offshore has released a 1Q20 trading update.


  • Ensuring continuous operation of projects and fleet (uptime of 99.3%) in the current environment.
  • Cost reduction to mitigate Covid-19 impacts and adapt to market circumstances.
  • Year-to-date Directional ­­­­­revenue of US$607 million, in line with expectation.
  • 2020 Directional revenue guidance adjusted from “above” to “around” US$2.3 billion.
  • 2020 Directional EBITDA guidance maintained at around US$900 million.
  • Final modules for the Johan Castberg turret mooring system shipped.
  • US$150 million dividend paid and €150 million 2020 share repurchase programme completed.

Financial highlights

Year-to-date Directional revenues were US$607 million compared with US$456 million in 1Q19. This 33% increase resulted from higher turnkey activity and higher revenues in lease and operate as a result of FPSO Liza Destiny joining the fleet at the end of 2019 together with last year’s acquisition of a minority partner’s ownership in five Brazilian FPSOs.

Compared with year-end 2019, net debt as at the end of 1Q20 increased by c. US$200 million to US$3.7 billion. While lease and operate continues to generate strong operating cash flow, the company is drawing down under the project loan facilities for continued investment in growth.

As at the end of March 2020, SBM Offshore had US$2.1 billion of liquidity, with US$0.5 billion from cash balances, US$1 billion from the undrawn revolving credit facility and US$0.6 billion under the remaining Liza Unity project loan. The Liza Destiny project loan is fully drawn. The financing process for the FPSO Sepetiba is progressing in line with the project execution schedule.

Project review

FPSO Liza Unity

Shortly after arriving in Singapore in February 2020, the Fast4Ward® MPF hull was moved into dry-dock. During this phase the mooring structures are integrated and the first topsides modules are lifted onto the vessel. Upon completion of the dry-dock phase, the hull will be transferred back to the integration quayside to complete the topsides lifting and integration campaign. Due to Covid-19, the yards in Singapore are currently closed.

FPSO Sepetiba

The construction yards in China reopened and are running near normal capacity following a period at the beginning of this year when the yards were closed due to the Chinese New Year and Covid-19. Keel laying for the Fast4Ward MPF hull was finalised and the topsides fabrication in China and Brazil has commenced.

Turret mooring system (TMS) Johan Castberg FPSO

In accordance with client schedule, the fabrication phase of the last two modules for the TMS for the Johan Castberg FPSO was successfully completed. The final modules were shipped from the yard in Dubai.

Fast4Ward hulls

Under the company’s Fast4Ward programme the total number of hulls ordered to date stands at five. Three hulls are allocated to projects.

Of the three allocated hulls, the first hull is allocated to FPSO Liza Unity and is completed. The next two hulls are allocated to FPSO Sepetiba and FPSO Prosperity. The Prosperity project remains subject to government approvals, project sanction and an authorisation to proceed with the next phase. The construction of these hulls is progressing while there has been an initial impact to the delivery schedule due to Covid-19.

Regarding the hulls not allocated to projects, hulls number four and five, construction of the fourth hull commenced and is making progress in line with SBM Offshore’s execution plan. Construction of the fifth hull has not started. The company continues to monitor the situation in light of the FPSO market, which is evolving both as a result of Covid-19 and disruptions in the oil market.

Operational update

SBM Offshore’s fleet uptime during 1Q20 was 99.3%, in line with the fleet’s lifetime historical average.

In response to the Covid-19 pandemic, business continuity protocols have been activated at shore bases as well as offshore in our fleet. The company’s Covid-19 response strategy aims to prevent the occurrence of cases on board our vessels and in onshore locations and to minimise impact on operations if and when cases are identified.

Various cases of Covid-19 have been identified in the fleet on multiple units. SBM Offshore’s response plans have been effective to date, in some cases supported by deep decontamination measures. The incremental costs from the implementation of these additional measures are charged to clients in the case of reimbursable contracts or otherwise borne by the relevant operating companies in which SBM Offshore has an ownership stake.

The Thunder Hawk semi-submersible production facility, owned 100% by SBM Offshore, was temporarily shut down due to Covid-19 impacts at the end of April upon operator request. The Thunder Hawk contract is the only lease contract in the SBM Offshore lease portfolio for which revenues are dependent on production.

Under contractual arrangements with clients the company has considerable time under charters in which to deal with disruptions from events outside the company’s control, thus providing it with considerable financial protection. To date, the company has been able to manage the Covid-19 situation without the need to use such protection.

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