Oil major BP has completed the transaction for the sale and leaseback of the Greater Tortue Ahmeyim floating, production, storage, and offloading vessel (FPSO).
U.S.-based oil and gas company Kosmos Energy, BP’s partner on the project, said on Monday that the completion of the transaction secured additional funding for the company’s future development costs on the Greater Tortue Ahmeyim (GTA) project.
BP agreed to sell the Greater Tortue Ahmeyim FPSO, currently under construction by Technip Energies in China, to an affiliate of BP. The FPSO will be leased back to BP under a long-term lease agreement, for exclusive use in the GTA project.
Delivery of the FPSO will occur after construction is complete and the FPSO has entered international waters, with the lease to BP becoming effective on the same date, currently estimated to be in the late third quarter of 2022.
Capital expenditures associated with the GTA project in 2021 net to Kosmos were previously estimated to be around $350 million. With the completion of the FPSO sale and leaseback transaction, Kosmos’ 2021 capital expenditures associated with the project have been reduced to approximately $190 million, with remaining cash calls on the project for 2021 covered through the proceeds of the sale.
The balance of the sale proceeds, as well as the additional savings from the transfer of remaining FPSO construction payments to BP, are expected to be largely realized in 2022.
The company also expects to refinance National Oil Company loans later this year, providing approximately $100 million in additional financing for the GTA project.
It is worth noting that Kosmos will reimburse BP for its pro-rata share of cost under the lease agreement, which will be classified as an operating expense.
Andrew G. Inglis , Kosmos Energy’s chairman and CEO, said: “ We are pleased to have successfully completed this transaction, which secures additional funding for our future development costs on the GTA project.
“ This transaction demonstrates the strength and alignment of the GTA partnership. Kosmos, BP, the Governments of Mauritania and Senegal, and the respective national oil companies, all recognize the strategic importance of the project and are working together to bring it to fruition ”.