The joint venture between SLP Engineering and Denmark’s Maerske is understood to have run more than £50m over budget on the delayed conversion of a tanker into an oil production system for Conoco’s McCulloch field in the North Sea.
The North Sea Production Company will own and operate the vessel on contract to Conoco over the expected five-year life of the field, paid on a production tariff.
The floating production storage and offloading vessel was scheduled to produce first oil in December last year. It is now expected to sail to the field this month and start producing in mid-summer.
Most of the delays and overruns have occurred at SLP’s Teesside yard, which is installing the vessel’s topsides. However, SLP’s project manager Bill Nicholson said: `I’m not prepared to discuss it.’
Conoco said it had not altered the terms of the contract to reflect the cost increase.