Upstream Production Solutions (UPS), Perth, a wholly owned subsidiary of GR Engineering Services Ltd., has agreed with the Australian Government’s Department of Industry, Science, Energy and Resources to provide operations and maintenance services to the Northern Endeavour floating production, storage and offtake (FPSO) vessel.
The agreement follows the government announcement that steps were underway to secure the continued safety and security of the FPSO after the liquidation of the Northern Oil and Gas Australia (NOGA) group of companies (OGJ Online, Feb. 5, 2020). The government also said it had established a temporary operations program to provide funding to support the operation and maintenance of the vessel.
As part of that program the Department has engaged UPS to provide operations and maintenance services that will reinstate minimum manning and restore safety critical services to the Northern Endeavour.
In announcing the contract, Minister for Resources, Water and Northern Australia, Keith Pitt, said the vessel was in reliable hands.
“It was essential that we re-crewed the Northern Endeavour quickly to maintain the safety of the vessel and the surrounding Timor Sea environment, and that has been done,” Pitt said.
“Lighthouse-mode operations will support the vessel and the associated subsea infrastructure and critical maintenance will be undertaken as required. No petroleum production can occur in lighthouse-mode,” he added.
UPS has now remobilized personnel to the vessel and is proceeding under an initial short-term contract to provide services to the Department on commercial terms, in a non-production environment.
Minister Pitt said the Australian Government will begin consultations with industry experts to consider a longer-term resolution to the situation.
“The liquidation of the NOGA group of companies highlights the importance to the nation of our oil and gas industries which are a valuable source of exports and vital for our energy security. We must maintain our strong reputation for environmental protections and safe operations,” he said.
The Northern Endeavour is permanently moored in 400 m of water between Laminaria and Corallina oil fields in the Timor Sea 550 km northwest of Darwin. The vessel has a storage capacity of 1.4 million bbl of oil and a production capacity of 19,000 b/d of oil.
UPS had formerly provided operations and maintenance services for the vessel for 3 ½ under NOGA until that group’s liquidation in February. GR Engineering’s assessment of its financial exposure to the NOGA group is $17.4 million (Aus.). GR will recognize an impairment of that amount in its half year results ended Dec. 31, 2019.
