FPSO OSX-1- It was Keppel Shipyard’s first project for OSX Brasil S.A. It has been chartered by OGX Petroleo e Gas Participacoes S.A. For operations in offshore Brazil. FPSO Aseng- Capable of processing 80,000 barrels of oil per day and storing 1.7 million barrels of oil, it.
OSX Brasil S.A. (“OSX” or “Company”), a Brazilian publicly held company, focused on the provision of equipment and services to the offshore oil and gas industry, by means of an integrated operation in shipbuilding, leasing of exploration and production (E&P) units, and operation and maintenance (O&M) services, hereby informs its shareholders and the market in general that:
FPSO OSX-1, the first floating production, storage and offloading vessel in OSX’s fleet, has concluded its conversion in Singapore and set sail for Brazil. The journey is estimated to take 40 to 50 days.
The FPSO OSX-1 is commissioned to produce the first oil for our client OGX Petróleo e Gás Ltda. (OGX), which is expected to start oil production during the fourth quarter of 2011. Chartered by OGX for a period of 20 years at an average day rate of US$ 263,000, FPSO OSX-1 will be employed in the Waimea accumulation, in the Campos Basin. “Last week, I participated with OSX’s and OGX’s teams in the sail-away ceremony of FPSO OSX-1 in Singapore, symbolizing the official delivery of the unit, which is an important achievement for both companies,” said Carlos Bellot, OSX’s Leasing and Chief Operation Officer.
FPSO OSX-1 was built by the Samsung shipyard in Korea, and was customized to meet the technical specifications required by OGX and Brazilian law in the Keppel shipyard, in Singapore, which carried out the construction, modification and upgrade of the modules located on the hull, known as the “topside”. Both shipyards have a strong reputation for carrying out these activities.
“For OSX, receiving the FPSO OSX-1 means the beginning of a routine that will be repeated dozens of times from now on: OSX delivering FPSOs and WHPs for production of oil and gas by our client OGX, and by other companies dedicated to making real the oil discoveries that Brazil has been conquering,” concluded Luiz Eduardo Guimarães Carneiro, OSX’s Chief Executive Officer.
- Vessel OSX 1 is a Floating Storage/Production, Registered in Liberia. Discover the vessel's particulars, including capacity, machinery, photos and ownership. Get the details of the current Voyage of OSX 1 including Position, Port Calls, Destination, ETA and Distance travelled - IMO.
- The acquired tanker that became the FPSO OSX-1 was converted by Singapore's Keppel Shipyard. Historically, Asia has been a small player on the global offshore production stage.
- FPSO OSX-1, the first floating production, storage and offloading vessel in OSX’s fleet, has concluded its conversion in Singapore and set sail for Brazil. The journey is estimated to take 40 to.
FPSO OSX-3 pictured during its May 2013 naming ceremony in Singapore. Photo credit: OSX
Editor’s Note: The Brazilian appeals court decision referred to below involves the FPSO OSX 3. The Court has based its decision on the grounds that Liberia is not a party to the Bustamante Code or to the International Convention for the Unification of Certain Rules of Law Relating to Maritime Liens and Mortgages (1926). The Court seems to reject commonly accepted international transportation custom of recognition of a preferred mortgage recorded with the vessel’s flag state by foreign courts and rules contrary to long-standing and well-accepted international case law.
The Bustamante Code, a treaty meant for the unification of rules on private international law in the Americas, had never received widespread support. Major ship registries in the Americas such as Antigua & Barbuda, Bahamas, Mexico and the U.S. are not parties to the Code.
Similarly, the 1926 Convention also failed to attract support by numerous other major international registries and national flag states such as Marshall Islands, Bahamas, Malta, Singapore, Norway, Greece and Germany.
The ramifications of this decision seem to be widespread and affect several stakeholders based on the above, although the decision appears to target “stationary” units and not vessels engaged in regular transit.
By Guillermo Parra-Bernal and Tatiana Bautzer
SAO PAULO, June 1 (Reuters) – A Brazilian appeals court has ruled that a Liberian mortgage is invalid for a Brazilian-owned oil production ship, sources with direct knowledge of the matter said on Wednesday, casting further doubt over the future of secured lending for such vessels in the world’s largest deepwater market.
The court in São Paulo upheld a February ruling voiding the use of a $500 million mortgage registered in Liberia for the OSX3 floating production, storage and offloading vessel, or FPSO, owned by a unit of OSX Brasil SA, said the sources, who requested anonymity since the decision has not been made public.
A spokeswoman for the court declined to confirm the ruling before it is published.
OSX Brasil, the shipbuilding arm of former billionaire Eike Batista’s mining, energy and logistics empire, has been under bankruptcy protection in Brazil for three years. The FPSO is owned by OSX3 Leasing BV unit, which is also under creditor protection in the Netherlands.
Wednesday’s ruling favors investment bank Grupo BTG Pactual SA in an effort to obtain immediate repayment on a $28 million loan from OSX3. Bondholders in OSX3, represented by Nordic Trustee ASA, had asked the court to reverse the earlier ruling, which broke their right to claim repayment first if OSX3 declared bankruptcy.
BTG Pactual also has a lien on the FPSO.
The case underscores the extent to which loopholes in Brazil’s bankruptcy protection laws and their interpretation by courts could stall secured lending for offshore oil vessels, complicating development of Brazil’s deepwater fields.
According to London-based law firm Norton Rose Fulbright LLP, the lower court’s ruling was affecting ongoing and future projects and financing deals, putting borrowers at risk of breaching credit terms. Lenders were ordering foreign-flagged ships operating in Brazil to reflag in countries that are signatories of the treaty, such as Panama.
“This has become a big issue for banks, since they thought they would be given priority in the line of repayment under the contractual structures in place,” said Andrew Haynes, partner at Norton Rose’s Rio de Janeiro office. He has no involvement in the case.
According to São Paulo-based law firm Souza Cescon Advogados, the appeals court’s failure to reverse the earlier decision will keep creating uncertainty among owners, creditors and operators of Liberian ships in Brazil.
Lawyers for Nordic Trustee are considering filing a lawsuit at Brazil’s Supreme Justice Tribunal, the top appeals court, said one of the sources. Felsberg Advogados, a law firm representing Nordic, declined to comment.
São Paulo-based BTG Pactual and law firm Tepedino, Migliori & Berezowski Advogados declined to comment.
PRECEDENCE
FPSOs are oil tankers converted to collect and process oil from deepwater fields and then unload it to other tankers that ship the output to shore. Apart from OSX3, other Liberian-registered FPSOs in Brazil include FPSO Polvo, FPSO Marlim Sul and FPSO Cidade de Mangaratiba, Thomson Reuters data showed.
International law would normally give precedence to the mortgage holders in bankruptcy proceedings. In this case, the mortgage was given as collateral to OSX bondholders.
A court-appointed administrator in the Netherlands has warned BTG Pactual that it could be held liable for the lien on OSX3 should it seek repayment before other creditors.
BTG Pactual had said the mortgage contract was invalid because there are no links between the ship and Liberia, where it is flagged. Liberia is not a member of a 1926 global treaty on ship mortgages. Nordic Trustee alleged that none of the 142 Liberian-flagged ships that operate in Brazilian waters have locally registered mortgages.
Ship owners “flag,” or register, their vessels in countries such as Liberia and Panama to avoid regulations, taxes and obligations that come with owning a ship in larger countries such as Brazil or the United States.
A year ago, a São Paulo court ordered the OSX3 FPSO be sold to repay creditors after BTG Pactual won an injunction. However, bondholders challenged the order, saying they had priority over BTG Pactual because OSX Leasing gave the mortgage as collateral.
Nordic Trustee’s lawyers said the prior rulings declaring Liberian mortgages void in Brazil could have a ripple effect within the industry, noting in one of the documents that “the court is ignoring widely followed principles of maritime law.” (Additional reporting by Jeb Blount in Rio de Janeiro; Edited by Daniel Flynn and Matthew Lewis)
(c) Copyright Thomson Reuters 2016.
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