Harland & Wolff Belfast Bags $74M Canadian FPSO Refurbishment Deal
Harland & Wolff has secured a contract with Canada-based Cenovus Energy for the mid-life upgrade of the SeaRose FPSO vessel.
The base contract value is approximately £61 million (~currently around $74 million).
The FPSO is expected to arrive at Harland & Wolff in Belfast in the first quarter of 2024 and will be in the building dock for a period of more than three months.
The contract follows a letter of intent announced earlier this year, and a number of pre-arrival works have already started, including inspections, procurement of steel, fabrication of customized blocks, and other dry dock operations.
Harland & Wolff will start certain fabrication works in FY 2023 so that it is fully prepared to start refurbishment and upgrade works as soon as the SeaRose FPSO arrives next year.
Upon completion of pre-arrival workstreams, the company is expected to generate revenues of approximately £10 million in FY 2023, with the outstanding balance expected to be received in FY 2024. At its peak, it is estimated that there will be circa 1,000 personnel working on the FPSO, including Harland & Wolff's staff and subcontractors.
Revenues from this contract are included within management's revenue expectations for the Harland & Wolff Group to achieve in FY2023 and FY2024, being £100m and £200 million, respectively.
John Wood, CEO of Harland & Wolff Group Holdings plc, said: "I am delighted that Cenovus has chosen Harland & Wolff as its preferred yard to undertake the mid-life upgrade of the SeaRose. The vessel first came into Belfast in 2012 so we will use our existing knowledge of this [FPSO], in addition to applying the latest technologies and innovations for these kinds of highly specialized projects.
"This is a significant win within our non-defense portfolio from a global, blue-chip energy group, and I am pleased that we are gaining a reputation as a go-to yard for large and complex programs. With an estimated 1,000 personnel on-site, this project will allow for further synergies in our execution, leveraging off of personnel, skill sets, and supply chains that will support the upcoming FSS program."
When it last year announced the decision to restart the West White Rose Project offshore Newfoundland and Labrador, Cenovus said that the SeaRose FPSO drydock program would proceed in 2024 and take 70 days.
The West White Rose is being developed via a fixed wellhead platform consisting of topsides supported by a concrete gravity structure, tied to the Sea Rose FPSO in Canada's Atlantic Ocean.
Cenovus said last year that first oil from the platform would be produced in the first half of 2026, with peak production anticipated to reach approximately 80,000 barrels per day (bbls/d), 45,000 bbls/d net to Cenovus, by year-end 2029.
The West White Rose Project will add an expected 14 years of production to the White Rose field.