BW Offshore sells FPSO while pursuing redeployment opportunities

While working on expanding the niche oil and gas segment by redeploying existing floating, production, storage, and offloading (FPSO) vessels and divesting non-core assets, as older units present an unbalanced risk/reward, Norway’s FPSO operator BW Offshore has decided to sell one of its FPSOs, which it recently marked as a redeployment candidate.

FPSO BW Opportunity; Source: BW Offshore

BW Offshore revealed on Friday, 10 March 2023, that it had signed an agreement for the sale of the FPSO BW Opportunity to an undisclosed buyer for a total consideration of $125 million. This sale is subject to conditions precedent. The firm expects the sale to be completed by the end of the first quarter of 2023.

According to BW Offshore, it is also exploring the commercial principles for the provision of engineering, procurement, construction and commissioning (EPCC) and operations and maintenance (O&M) services for a five-year transitional period with the buyer.

The FPSO BW Opportunity was converted in 2007. This vessel has an oil processing capacity of 35,000 bbl/d, a gas handling capacity of 350 mmscfd, a water injection capacity of 31,500 bbl/d, and a storage capacity of 900,000 bbl.

Recently, BW Offshore highlighted that the FPSO BW Opportunity was a versatile redeployment candidate, suitable for gas and oil projects, adding that the FPSO was less capital-intensive compared to a newbuild.

BW Offshore has been actively working on maximising value from its non-core fleet. To this end, the firm is engaged in divestment dialogues for FPSOs: BW Athena, Abo, Espoir Ivoirien and Sendje Berge with the aim of closing these deals in 1H 2023.

In addition, the company expects the recycling of the FPSO Petróleo Nautipa late in 2023 and the conclusion of the sale of the FPSO Polvo in 2Q 2023 with $50 million paid to the company. This is being undertaken to simplify organisation and free up capital from non-core assets in line with BW Offshore’s strategy.

BW Offshore already sold several vessels last year 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 2022 at a price of $12.8 million after a cold lay-up in Oman. Another vessel, which was sold last year, is the FPSO BW Joko Tole, operating on the TSB field offshore Indonesia where the first gas was achieved in mid-2012.

Meanwhile, the company is also engaged in the floating offshore wind market and claims that the rapid growth of this market is confirmed by the award of more than 25 GW of projects worldwide in 2022. The firm pointed out that BW Ideol had 1 GW of projects under development and about 2.9 GW of the substantiated pipeline at year-end 2022.

Additionally, multiple feasibility studies by BW Offshore and BW Ideol are in the pipeline for floating wind power to platform solutions, targeting accelerated revenue generation through EPCI activities. BW Offshore explains that the focus is on “preserving technology leadership, optimising project execution and strengthening competencies.”

While BW Ideol’s full-year revenue in 2022 was EUR 6.6 million (nearly $6.99 million), it is progressing long-term financing plan for closing in 1H 2023, including a planned EUR 10 million (almost $10.6 million) loan from BW Offshore.