Norwegian company Songa Floating Production has filed for bankruptcy due to it unsuccessful efforts to raise finance to service its debts. The company, which was formerly called Nortechs FPSO, has been hurt by the misfortunes with its floating production, storage and offloading vessel East Fortune, which was converted in January 2009 for the Bilabri field off Nigeria but was never delivered because the Bilabri owner failed to make payment commitments.
Songa Floating said in a statement it had "pursued every lease contract and sales opportunity for the vessel that it was aware of" during 2009 but the "market was exceedingly weak". The company has a contract to place its FPSO short term in the Kakap area off Indonesia for Star Energy, and this has provided sufficient revenue to cover operating costs and interest on Songa Floating's bank loan. But the Star contract did not provide sufficient revenue to pay the interest on its convertible bond or to repay the principal of the bank loan.
"As Songa Floating Production has been unsuccessful in securing further financing and as Songa Floating Production is unable to fulfill its payment obligations to its creditors, the board of directors, regrettably, could see no other option than to file for bankruptcy," said the company.
