Teekay inks Brazil FPSO deal

OE Staff
Thursday, December 18, 2014

Teekay Offshore Partners has entered into an agreement with a consortium led by Queiroz Galvão Exploração e Produção (QGEP) to provide a floating production, storage and offloading (FPSO) unit for the Atlanta field in the Santos Basin offshore Brazil.

In connection with the contract with QGEP, the Partnership has agreed to acquire the Petrojarl I FPSO from Teekay Corporation for US$57 million. The FPSO is due to undergo upgrades at the Damen Shipyard Group's DSR Schiedam Shipyard in the Netherlands for a fully built-up cost of approximately $240 million, which includes the cost of acquiring the Petrojarl I.

The FPSO is due to start operations in 1H 2016 under a five-year charter contract with QGEP. 

The Petrojarl I FPSO will be used as an early production system (EPS) unit on the Atlanta field, 185km offshore from the Brazil coast at 1550m water depth and contains an estimated 260MM boe recoverable.

"We continue to secure new, accretive growth in our Offshore Production business with our second contract award in just three months," commented Peter Evensen, Chief Executive Officer of Teekay Offshore. "The QGEP contract award further strengthens the Partnership's position in the fast-growing Brazilian offshore market and highlights the Partnership's ability to provide cost-effective solutions to its customers by redeploying our Sponsor's existing FPSO units."

"In addition to our acquisition of the Petrojarl 1 FPSO, the Partnership's Board of Directors also recently approved the acquisition of the Petrojarl Knarr FPSO from Teekay, subject to the unit achieving first oil and commencing its charter contract", Evensen added. "The purchase price for the FPSO, which is based on a fully built-up cost of approximately $1.2 billion, is expected to be financed through the assumption of an existing $815 million long-term debt facility and up to $400 million of short-term credit financing from Teekay. The installation and offshore testing of the Petrojarl Knarr FPSO on its North Sea field is progressing; however, recent unfavorable weather conditions have delayed certain of these activities. Depending on weather conditions, the Partnership currently expects to complete the acquisition of the Petrojarl Knarr and commence its charter with BG Group during the first quarter of 2015."

Categories: FPSO South America Floating Production

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