BW Offshore has agreed to acquire a 70% stake in an oilfield off Brazil for $90m, the company confirmed on Friday.
The deal with Brazilian oil company Petrobras is subject to approval by The Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP).
The Singapore-based FPSO owner and operator said the acquisition price will be paid over three milestones with a tail-heavy final payment.
The first milestone of $20m is due on receipt of ANP approval as operator and formal sanction of the transaction, expected in the second half of 2019.
A second payment of $20m is due at start of drilling activities and the third part-payment, representing the remaining $50m, is due at first oil or three years after the start of drilling activities, whichever comes first.
BW Offshore added that the acquisition of the remaining 30% field interest is pending board approval by US oil major Chevron.
The Maromba field is located close to the Peregrino, Papa Terra and Polvo oil fields where BW Offshore currently has or has had operations.
It intends to deploy one of its existing FPSOs to the field as part of a “phased development” to “de-risk the project” like at the Dussafu development.
“Maromba meets many of the criteria our E&P strategy is founded on; proven resources, high upside potential, located in a country where we currently operate, phased development and the use of one of our own FPSOs,” said chief executive Carl K Arnet.
BW Offshore says it will pay about $1 per barrel of recoverable resources in an area it says it “knows well”.
It says it is also evaluating “several development options” within its phased development strategy that range from $3 to $7 of capital cost per recoverable barrel plus FPSO lease.
Arnet said Maromba has the potential to create “significant value” for the shareholders.
This is the BW Group’s second oilfield investment, in late 2016 it acquired a major slice of the Dussafu production sharing contract.
BW has a 66% stake in the Gabon oil field project, with Norwegian-listed independent E&P company Panoro Energy controlling the balance.
