Norwegian offshore vessel operator DOF has warned that several of its vessels might be laid up after the end of their current contracts, citing lack of new work opportunities amid the oil price rout and COVID-19 pandemic effects. On a positive note, Equinor has chartered one of its vessels on a long term deal.
“There has been a sharp decline in the tender activities, with few new contract opportunities and less projects to bid for. Due to the sharp decline in the oil price, the oil companies have reduced their exploration activity substantially and some have also started to reduce existing production.
“It must be expected that the Group will continue to experience adverse consequences of the sharp decline in the oil price, and the responses of the oil companies to such decline,” DOF said.
“Several of the Group’s vessels will finish their firm contract periods during 2020, and if the challenging market continues most of these vessels could move into lay-up,” the company added, without providing the exact number of the vessels that might be affected.
Skandi Vega stays with Equinor
Also, on a positive note, DOF has said that Equinor has awarded Skandi Vega AHTS vessel a new contract. The vessel is owned by DOF Rederi.
The duration of the contract is 6 months firm, with up to 6 months’ option. Equinor has an option to change the contract to a 2 or 3 year firm period within the next 4 months. Skandi Vega has been on contract to Equinor since the delivery in 2010.
The company has also said that it previously announced EBITDA guidance for 2020 no longer applied.
“It is currently too early to express any view on the expected EBITDA for 2020 in light of the changed environment,” DOF said.
Worth noting, DOF has recently asked its bondholders for a waiver from and suspension of all payment obligations for a certain period to give it time to come up with a robust and long-term financing solution.