Oil firms advised to lease

North Sea oil companies can expect to spend over 30% more on floating production vessels they own rather than lease, according to the Bluewater Group. Andre Bloemen, the contractor’s vice-president of finance and administration, is to tell a London conference on 2 April that if an oil company buys a floating production storage and offloading […]

North Sea oil companies can expect to spend over 30% more on floating production vessels they own rather than lease, according to the Bluewater Group.

Andre Bloemen, the contractor’s vice-president of finance and administration, is to tell a London conference on 2 April that if an oil company buys a floating production storage and offloading vessel `the builder will wish to make money by increasing the sale price from the contracted amount’.

According to Bloemen the fact that the oil company needs the vessel `provides leverage against which contracts cannot provide protection’.

With a leased facility, by contrast, he says the contractor takes all the construction risks and the oil company pays the agreed rate from the first day of production.