Lamprell, a UAE-based engineering services firm to the oil and gas industry, has announced it is making a $14.3 million provision in its accounts for increased costs on windfarm liftboat contracts.
In a statement to investors, Lamprell said three windfarm liftboat contracts related to North Sea projects – two for Fred Olsen Windcarrier and one for Seajacks 3 – are likely to hit cost overruns to completion totalling $14.3 million, which Lamprell will have to soak up under the lump-sum turn key contracts struck.Â
“This provision relates solely to these contracts and arises primarily as a result of increased labour requirements and additional material and subcontract costs,” said the company. “We are confident that similar issues do not affect our other ongoing projects.”
Overall the company has has a strong year, will a burgeoning order book and the official opening of its state-of-the-art Hamriyah facility set to open at the end of the month.
“Notwithstanding this provision, the Company believes that its net earnings for the 2011 full year will be in line with market expectations, supported by the release, in accordance with its normal accounting policies, of certain contingencies held in relation to rig projects, the successful resolution of a dispute with regards to a major MIS project, and increases in the scopes of works on existing contracts,” said the statement.
