Saipem upholds timeline for FPSO sale off Brazil

Italy’s engineering, drilling, and construction services provider Saipem has confirmed the timeline for closing its divestment process related to a floating production storage and offloading (FPSO) vessel working in the Espírito Santo Basin offshore Brazil.

After BW Energy inked an agreement to acquire a 100 per cent working interest in the Golfinho and Camarupim clusters and a 65 per cent stake in the BM-ES-23 block in June 2022 from Petrobras, the company made arrangements to acquire the FPSO Cidade de Vitória from Saipem. This vessel is working on the Golfinho field. Both transactions were expected to close in 1Q 2023, however, delays extended the timeline.

BW Energy wrapped up the acquisition of the Golfinho and Camarupim clusters a few days ago, which enabled it to assume ownership and operatorship of approximately 10,000 barrels of daily oil production, several proven low-risk in-field development opportunities with short lead times, and substantial potential long-term upside from proven gas accumulations. 

At the time, the Oslo Stock Exchange-listed player revealed that the acquisition of the FPSO Cidade de Vitória from Saipem was expected to be completed in 4Q 2023 when the current short-term lease and operating contract for the FPSO expires. 

The closing of the Golfinho transaction was a condition precedent under the memorandum of agreement (MOA) between BW Energy and Saipem for the sale and initial payments for the FPSO, which is currently operating at full production capacity. 

Therefore, Saipem has confirmed that it is working with BW Energy to complete the takeover and delivery process for the FPSO Cidade de Vitória, which is anticipated to occur within the fourth quarter of 2023. Saipem will continue to operate the FPSO, providing operation and maintenance services to BW Energy until the takeover. 

BW Energy is expected to pay Saipem a consideration equal to $73 million, of which $38 million is due at the Golfinho transaction closing and $35 million will be delivered in 18 monthly instalments, following the takeover. 

Located at a water depth between 1,300 and 2,200 metres in the Espírito Santo Basin, the Golfinho cluster comprises the Golfinho oil field, the Canapu non-associated gas field, and the exploration block BM-ES-23, which holds the Brigadeiro gas and condensate discovery.

On the other hand, the adjacent Camarupim cluster is located in water depths between 100 and 1,050 metres, comprising the non-producing gas fields of Camarupim and Camarupim Norte.