Financial Issue: The main reason for the postponement
The project for Chevron Thailand second P+A that the original funding request has been postponed.
After the project had been approved by their Contract’s Review Committee four times, a Letter of Intent had been issued to us, which we acted on by ordering the very long lead items of equipment totaling US$2.5m.
Before Chevron Thailand could issue the formal Letter of Award under the terms of the initial P+A contract, instructions were issued from their HQ that they must make savings of US$200m in 2014. The net result was that all new projects were either cancelled or postponed, our second P+A unit has been postponed.
The second P+A Unit will be required by Chevron Thailand, however, at this time they cannot commit to exactly when.
Technical Issue:
After the Letter of Intent had been issued a member of their Geomatics team had reviewed the general Arrangement of the Liftboat that was proposed and realised that the spud can footprint did not match their existing spud can holes left by their drilling jack rigs. This partial overlap could result in one of the liftboat legs falling in to a spud can hole. This is not a major problem because the P+A operation can be performed from a DP2 boat just as the first P+A is supported. We plan to have a larger liftboat manufactured by 2016 which is more suitable as the legs are further apart and will exactly match their existing spud can holes. Efforts will be made to gain interest and buy in from Chevron Thailand is this new build liftboat.
Lesson Learned:
No equipment will be purchased in advance of receiving a signed contract or service work order.