£61 million contract award – SeaRose FPSO Mid-Life Upgrade
Harland & Wolff Group Holdings plc (AIM: HARL), the UK quoted company focused on strategic infrastructure projects and physical asset lifecycle management, is pleased to announce that Cenovus Energy Inc. (“Cenovus”) has awarded the mid-life upgrade contract of the SeaRose Floating Production Storage and Offloading (“FPSO”) vessel to Harland & Wolff (Belfast) Limited. This contract follows from the Letter of Intent that was previously announced by the Company on 31 July 2023. Cenovus Energy is an international integrated oil and natural gas company headquartered in Calgary, Canada, with a market capitalisation of circa CA$54bn.
The base contract value is approximately £61 million. The vessel is expected to arrive in in the first quarter of 2024 and will be in the Building Dock for a period of more than three months.
A number of pre-arrival works have already commenced, including inspections, procurement of steel, fabrication of customised blocks and other dry dock operations. The Company is to commence certain fabrication works in FY 2023 so that it is fully prepared to commence refurbishment and upgrade works as soon as the vessel arrives next year. Upon completion of pre-arrival workstreams, the Company is expected to generate revenues of approximately £10 million in FY 2023, with the outstanding balance expected to be received in FY 2024. At its peak, it is estimated that there will be circa 1,000 personnel working on the vessel including the Company’s staff and subcontractors.
Revenues from this contract are included within management’s revenue expectations for the Group to achieve in FY2023 and FY2024, being £100m and £200m respectively.
John Wood, CEO of Harland & Wolff Group Holdings plc, comments:
“I am delighted that Cenovus has chosen Harland & Wolff as its preferred yard to undertake the mid-life upgrade of the SeaRose. The vessel first came into Belfast in 2012 so we will use our existing knowledge of this FSPO, in addition to applying the latest technologies and innovations for these kinds of highly specialised projects.
This is a significant win within our non-defence portfolio from a global, blue-chip energy group and I am pleased that we are gaining a reputation as a go-to yard for large and complex programmes. With an estimated 1,000 personnel on-site, this project will allow for further synergies in our execution, leveraging off of personnel, skill sets and supply chains that will support the upcoming FSS Programme.”
