An FPSO charter worth up to US $3.5 billion has been won by Yinson Holdings Berhad to supply the floating production system for Eni’s deepwater Offshore Cape Three Points (OCTP) development offshore Ghana.
The consortium of Yinson Production (West Africa) Pte Ltd. (YPWA) and Yinson Production West Africa Ltd. (YPWAL) was awarded the contract for the chartering, operation and maintenance of the FPSO by Eni Ghana E&P in the block, located in the Tano Basin approximately 60 km offshore.
YPWA will be the FPSO chartering company while YPWAL will take care of the operation and maintenance aspects, with an effective contract date of 27 January 2015. Yinson will use the former 309,000-dwt Ulriken VLCC (built in 1998) for the project, with the tanker (now renamed the Yinson Genesis) having been bought late last year for $26.25m. It is not yet known which SE Asian yard will carry out the FPSO conversion job.
The firm charter period of the contract is for 15 years, with five yearly extension options exercisable by the client. The estimated aggregate value of the contract (excluding reimbursable and cost escalation) during the firm charter period is up to approximately $2.539 billion, and an estimated total aggregate value of up to $3.256 billion if Eni exercises all five annual options.
The FPSO itself is expected to start operations in the block in 2017.
YPWA is an indirect wholly-owned subsidiary of Yinson incorporated in Singapore and is principally involved in ship management services incidental to oil and gas extraction. YPWAL is a Ghanaian joint venture company between Yinson Production Pte. Ltd. (49%) and the indigenous Oil and Marine Agencies Ghana Ltd. (OMA) with the majority 51%.
The OCTP block is operated by Eni (47.2%) with its partners being Vitol Upstream Ghana Limited (37.8%) and the Ghanaian state-owned Ghana National Petroleum Company (15%), with the latter having an option to take an additional 5%.
Yinson is now the sixth-largest FPSO operator in the world, and is understood to be bidding for several medium-sized projects elsewhere in SE Asia. The company completed its acquisition of Norway’s Fred Olsen Production in January last year, and has a portfolio of four FPSOs, one FSO and one mobile offshore production unit.
- Eni, Vitol and GNPC also formally signed the agreement with the President of Ghana, John Dramani Mahama, and the Minister of Petroleum, Emmanuel Armah-Kofi Buah, to proceed with the OCTP project, which will also provide domestic gas supply to Ghana’s thermal power plants for more than 15 years. First oil is expected in 2017, first gas in 2018 and peak production is forecast at 80,000 boe/d in 2019.