BW Offshore takes a hit in depressed oil and gas sectorBW Offshore takes a hit in depressed oil and gas sector

The company also completed an impairment review of fixed assets during Q4 which led to additional charges of $85m for damages on FPSO Cidade de São Mateus - which exploded off Brazil in February claiming nine lives - and $49.3m for revised-down values of other vessels.

Net loss for Q4 amounted to $234.5m, compared to net loss of $7.3m in Q3.

The company called the Q4 adjustments only “prudent” due to “expectations of prolonged downturn” and “limited new awards in the short to medium term”. It also warned that “with the rapid fall in oil prices, BW Offshore faces increased risks of customers defaulting on their obligations.”

However, it said that outsourcing of production remains a cost-effective solution for oil and gas companies in the longer term, and predicted “an improved market from mid-2017 where idle units are expected to return to employment.”

BW Offshore operates 17 units, including an owned fleet of 14 FPSOs and one FSO. Average Q4 uptime for vessels, excluding the damaged Cidade de São Mateus still undergoing repairs, was 99.6%.