courtesy APL

The floating production turret business APL will see 20 percent of it staff laid off in a capacity-cutting move by parent shipping company BW Offshore.

In a note to shareholders Monday, BW Offshore said “a decline in order intake” has been a feature of the past year.

“Due to the reduced E&P spending, APL does not expect a significant volume of new orders in the near-term,” a statement said, adding that all new projects will likely be based on new concepts and technology. To that end, APL will initiate “a second step” to deal with the slow-down: an increase in product development “to prepare the new solutions that will be required in future projects.”

The message harkens back to the late 1990’s, when Norwegian industry was sustained via careful technological innovation through lean times of $10-a-barrel oil.

"Since the start of the economic downturn almost a year ago we have seen a reduction in the order intake within APL that has been unprecedented, said company chief exec Carl K. Arnet.

“Even 1997-1998 did not lead to the same dramatic reduction in activities,” he said, admitting that the strong order book seen at the beginning of the year had been eaten into.

“But even if we firmly believe in the longer term potential and viability of this business, we have to adjust to the current reality in order to remain a healthy company,” Arnet was quoted as saying.

Some 300 of BW Offshore employees work for APL, a maker of production turrets and offshore buoy loading systems for ships since 1993, when comercializing the Submerged Turret Loading system began..

In other news involving floating producers, Nexus Floating Production said its bondholders had agreed to allow the company to defer two debt payments while financing is put in place. Some $250 million in notes are understood to be affected.

“Each new deferral of the interest payment due dates will be subject to the banks agreeing to release sufficient working capital for the same period,” a Nexus statement said.

“This will give the Company more time to continue the discussions with its banks and bondholders in order to seek a solution to its current financial challenges,” the statement continued

Aker Floating Production, too, felt the day’s sting. It’s stock was down 3.6 percent when Oslo closed. BW Offshore was down less than a percentage point.

ws@scandoil.com

Tags: APL, BW Offshore, Nexus Floating Production