Songa Offshore Expects 'Challenging Year'

Norway's Songa Offshore said Friday that it expects 2015 to be a "challenging year". The rig operator noted that the fall in the oil price has led to oil companies postponing and cancelling projects, and that it expects more rigs to leave the Norwegian Continental Shelf and become stacked.

"Visibility is low and competition for the few tenders is fierce," Songa said as it reported its results for 2014.

Last year the company generated revenues of $494.8 million, compared to $562.2 million in 2013. However, a reduction in its operating expenses as well as administration costs led to it almost halving its pre-tax loss to $56.6 million (2013: $102.4 million loss).

Among notable events occurring in 2014 that Songa highlighted was the return to service of the Songa Dee (mid-water semisub) rig at the end of December, following the Special Periodic Survey performed at Invergordon, Scotland that began in late August. The out-of-service period of 124 days exceeded the budget of 65 days due to additional scope of work, unexpected failure on one of the four main engines and longer-than-planned acceptance testing. The yard stay costs were $105 million, compared to the $90 million the firm had budgeted.

Songa said it has strengthened its Korea Cat D project team to secure timely and efficient rig deliveries.

It added that the final Cat D delivery schedule has been agreed with DSME yard so that Songa Equinox will be delivered in mid-May this year, Songa Endurance will be delivered by the end of July, Songa Encourage in September and Songa Enabler in November.

 



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