Photo: Illustration; Source: BW Offshore

BW Offshore closes divestment of FPSO operating in Indonesia

In a bid to sell non-core assets to advance its transition to floating energy infrastructure investments, Norway’s FPSO operator BW Offshore has completed the divestment process for one of its FPSO vessels operating off Indonesia.

In an update on the divestment process released on Friday, BW Offshore confirmed it had closed the transaction for the sale of the FPSO BW Joko Tole. This is a gas-producing FPSO operating on the TSB field offshore Indonesia where the first gas was achieved in mid-2012.

Back in January 2022, BW Offshore inked a deal to sell this FPSO 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.

BW Joko Tole FPSO; Source: BW Offshore
BW Joko Tole FPSO; Source: BW Offshore

At the time, the FPSO operator revealed that the consortium would continue to operate this FPSO under the lease contract with Kangean Energy Indonesia, explaining that the sale, once completed, should free up over $50 million of liquidity.

In addition, the firm informed that it would provide transition services for a period of up to four months after the closing of this transaction to ensure safe and uninterrupted transfer of operations, including the local organisation operating the FPSO to the new buyer.

Less than two months after the sale announcement, BW Offshore got a contract extension for the lease and operation of this FPSO.

In late May 2022, BW Offshore disclosed in its 1Q 2022 report that it was seeking to optimise its asset portfolio and overall cost base, explaining that this process may include further divestments or recycling of FPSOs without contracts if redeployment opportunities did not materialise. The Norwegian firm also stated that “recent asset divestments have strengthened the company’s financial position and support growth into accretive offshore energy projects and long-term value creation.”

BW Offshore has already sold several vessels in recent months as part of its divestment strategy. One of these vessels is the FPSO Cidade de São Vicente, which was sold to Priya Blue Industries in February at a price of $12.8 million after a cold-lay-up in Oman.

In late April, a report emerged that a worker lost his life while scrapping an FPSO formerly owned by BW Offshore at this Indian beaching yard.

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In response to this claim, BW Offshore said that the incident “was unrelated to the ongoing recycling of former BW Offshore FPSOs at the yard.”