October 10, 2012 / 2:48 PM / 5 years ago

Talisman, SBM differ on safety of Norway oil platform

OSLO/AMSTERDAM (Reuters) - Norway's evacuated Yme oil platform is safe, its constructor Dutch SBM Offshore (SBMO.AS) said on Wednesday, rebuffing calls from the operator of the facility, Canada's Talisman TLM.N, to repair it urgently.

The two companies have been in dispute over the platform's use since Talisman withdrew all personnel from there in July, warning it was at risk of collapsing this winter.

The problems at Yme led SBM Offshore and Talisman to take hundreds of millions of euros in impairment charges this year, driving down profits and prompting management shake ups.

"I don't want to speculate whether it would collapse or not collapse, but our assessment is that the structure is not safe in its present state," Talisman spokesman Vidar Nedreboe told Reuters on Tuesday.

"We need SBM to execute the minimum repair asap," he said, adding Talisman's view was that repairs had to be made by February at the latest.

In July, Talisman warned the Norway's Petroleum Safety Authority that Yme faced a "structural collapse" due to the risk of cracks forming in the platform's legs.

Nedreboe said Talisman had identified the minimum repairs needed for the platform to survive the winter, but added it was up to SBM carry them out. "This is SBM's platform. SBM has to fix it," he added.

But SBM Offshore told Reuters on Wednesday the platform "was safe", citing the company's preliminary findings of its checks.

"The physical inspections that have taken place have not changed our position regarding the safety of the platform," SBM Offshore Investor Relations Officer Sebastiaan De Ronde Bresser told Reuters.

SBM has hired a Norwegian risk management firm DNV to assess the situation with Yme platform.

DNV denied this week Norwegian media reports that it had concluded the platform was "fit for duty."

CHARGES

In August, SBM said it would book 850 million euros ($1.10 billion) in charges this year and did not expect that number to rise due to issues at Yme.

De Ronde Bresser on Wednesday declined to comment on possible additional impairment charges.

Talisman, which holds 60 percent stake in the license, has already written off some of its Yme investment, reporting remaining book value associated with the investment at $644 million as of end-June.

Polish refiner Lotos LTSP.WA, a partner with 20 percent, took a 935 million zloty ($280 million) charge on Yme in its first-half results, cutting the book value of the upstream project by 74 percent.

Norske ADEC holds 10 percent and Wintershall, an arm of BASF (BASFn.DE), has 10 percent.

"SBM is in constructive talks with Talisman and has set mid-November as a target date to update investors about a possible outcome of the dispute," De Ronde Bresser said. "There are a whole range of outcomes being discussed," he added, declining to elaborate.

The project to redevelop the field after Norway's Statoil (STL.OL) operated it from between 1996 to 2001 is well over a year behind schedule.

The Yme field was discovered in 1987 and has reserves of 75.5 million barrels of recoverable oil left. It is the first oilfield on the Norwegian continental shelf to be redeveloped after having been shut down.

The cost of redeveloping it has already totaled 14.1 billion Norwegian crowns ($2.46 billion), exceeding the original estimate presented in 2007 by 9.2 billion crowns, a document released with Norway's draft 2013 budget this week showed. ($1 = 5.7234 Norwegian crowns) ($1 = 0.7754 euros)

Editing by James Jukwey

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