Teekay Corporation has extended its FPSO unit contract with the Chestnut Joint Venture in the North Sea until March 2023, ensuring consistent revenue and supporting ongoing drilling efforts.

Information on the Target

Teekay Corporation, a prominent provider of marine transportation services for crude oil and gas, has successfully extended the contract for its Floating Production Storage and Offloading (FPSO) unit, the Hummingbird Spirit, with the Chestnut Joint Venture. This agreement marks the continuation of a long-term relationship with Spirit Energy Ltd. and Dana Petroleum Ltd. on the Chestnut field in the North Sea. The Hummingbird will now be employed until March 2023, effective from October 1, 2019, facilitating a new drilling program designed to enhance production in the area.

The new contract stipulates a fixed charter rate, diverging from the previous arrangement which included an oil production/price tariff. This approach not only supports the ongoing operations but also provides Teekay with greater clarity regarding cash flows. Kenneth Hvid, Teekay’s President and CEO, emphasized the significance of this contract extension, noting the commitment to advancing production at the Chestnut field, which has been operational since 2008.

Industry Overview in the North Sea

The North Sea has long been a hub for oil and gas exploration and production, historically characterized by its mature fields and complex logistics due to harsh weather conditions. As traditional oil and gas reserves have begun t