Overseas Shipholding Group, USA, has entered into a settlement agreement with the American Shipping Company (AMSC), Aker Philadelphia Shipyard, and Aker Philadelphia Shipyard ("APSI"), that settles all outstanding commercial disputes between OSG and Aker and provides for the dismissal with prejudice of all the claims in the arbitration among the parties.
The settlement also provides for certain modifications to other existing agreements among AMSC and OSG, including eliminating restrictions on OSG's ability to purchase Jones Act product tankers, changes to the profit sharing agreement as well as providing vessel purchase rights under specific conditions. The settlement agreement has received all necessary third party approvals as well as approval from the US Coast Guard.
In connection with the agreement, OSG will purchase two Handysize product carriers, the 'Overseas Cascade' and Hull 015 (TBN 'Overseas Chinook') for approximately US$115 million per vessel.
The 'Overseas Cascade' and TBN 'Overseas Chinook' will be converted to shuttle tankers and have been chartered out to Petrobras America, Inc.
Following conversion work, the vessels are expected to deliver to Petrobras in the second quarters of 2010 and 2011, respectively. The shuttle tankers will transport oil from Petrobras' FPSO facilities located in the Cascade and Chinook ultra-deepwater fields in the US Gulf of Mexico.
