The Norwegian offshore services company Archer has announced its decision to exit offshore wind energy engineering, procurement, and construction projects, and is considering the partial or complete sale of Archer Wind. This decision follows commercial problems in the Culzean pilot project in the North Sea off the coast of England.
Commercial Issues and Financial Impacts
Along with this announcement, Archer also released its third-quarter financial statistics and mentioned a temporary suspension of shareholder dividend distribution. The company attributed the issues to uncertainty regarding variable orders in dispute with a customer and a separate claim against a subcontractor. Archer emphasized that it has completed the main deliveries for the Culzean project, but negotiations over variable orders have faced challenges and taken longer than anticipated.
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Culzean Project Details
The Culzean project includes a floating wind turbine with a capacity of 3 megawatts, located approximately 2 kilometers from the Culzean gas platform owned by TotalEnergies and over 200 kilometers away from Scotland. This unit is designed using a modular semi-submersible foundation of the Ocergy type, aiming to supply about 20 percent of the platform's electricity needs and reduce reliance on gas turbines.
Archer Wind secured its initial contract for this project from TotalEnergies in August 2024, which included the provision of the floating foundation and the execution of the related project. By the end of September 2023, Archer's net operating debt reached approximately $525 million, up from $435 million at the end of 2022. This increase was due to delays in commercial settlements and growth investments.
Archer's CEO, Dag Skindlo, has stated that the group will refocus on its service businesses and will not seek new wind EPC projects. Instead, the company will prioritize repetitive work in well services, platform operations, and drilling, and despite the cash pressure from Culzean, it will maintain its annual financial forecast.
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