January 24, 2012 / 6:58 AM / in 6 years

SBM Offshore warns of full-year hit from dispute

AMSTERDAM, Jan 24 (Reuters) - Dutch maritime oil and gas engineer SBM Offshore said on Tuesday a dispute with a client would lead to “a significant additional adverse impact” on its 2011 results, and its chief financial officer was quitting in May.

The world’s largest supplier of floating production, storage and offloading (FPSO) platforms shocked investors in July when it announced a $450 million impairment charge, resulting in a first-half operating loss and a shake-up at the top.

The charge resulted from a row with two clients, Canadian group Encana, which is working on the Deep Panuke gas project off the coast of Nova Scotia, and Talisman Energy , which is developing the Yme oilfield offshore Norway.

SBM Offshore said on Tuesday it was facing increased challenges with the hook-up and commissioning of the Yme platform.

“Continuing intransigence and unreasonable client demands, which are being aggressively resisted, are contributing significantly to the very low productivity and increased scope of work, all of which are the subject of arbitration proceedings with the client,” it said. “This is further exacerbated by continuing bad weather.”

It said revised financial impact will be released as soon as feasible and were expected to lead to a significant additional adverse impact on the 2011 results, with the eventual outcome dependant upon resolution of ongoing disputes with the client. (Reporting by Sara Webb; Editing by Dan Lalor)

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