BW Offshore Selling FPSO To Focus On Floating Energy Investments
FPSO operator BW Offshore has signed an agreement for the sale of one of its FPSO vessels in line with its strategy to transition to floating energy infrastructure investments.
BW Offshore said that the FPSO in question was BW Joko Tole. It was sold to PT Bahari Inti Tanker and PT Cahaya Haluan Pasifik, both of which are Indonesian companies, in consortium with PT Buana Lintas Lautan Tbk, a company publicly listed in Indonesia.
The consortium will continue to operate the FPSO under the lease contract with Kangean Energy Indonesia which is supposed to end in 2022. The deal has an option to extend until 2026.
BW Joko Tole started working for Kangean in Indonesia on the TSB field back in 2012. Its storage capacity is 200,000 bbl, an oil processing capacity of 2,200 bbl/d, and a gas handling capacity of 340 mmscfd.
According to the company, the transaction is part of BW Offshore’s strategy to transition to floating energy infrastructure investments.
The sale will free up over $50 million of liquidity, comprising of net sale proceeds of $42.5 million and the release of $9 million of working capital upon closing. There is no debt attached to the FPSO.
The company expects to book a loss from the transaction of around $23 million and a tax expense of around $12 million from the write-down of a related deferred tax asset. These non-cash items will be recorded in the accounts for the fourth quarter of 2021.
“The transaction follows our strategy of optimizing the value from the non-core FPSO fleet, which includes divesting assets with marginal contracts close to end of the firm period while progressing our transition to floating energy infrastructure investments,” said Marco Beenen, the CEO of BW Offshore.
“We are pleased that the BW Joko Tole has found a new owner with a strong local connection which will continue to operate the unit in Indonesia,” he added.
The transaction is subject to customary conditions precedent with closing expected late in the first quarter of 2022.
BW Offshore added that it would provide transition services for a period of up to four months after closing to ensure safe and uninterrupted transfer of operations including the local organization operating the FPSO to the new buyer.
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