Oslo-based BW Energy inked two deals for a combined $148 million related to the acquisition of state-owned Petrobras’ working interest in the Golfinho and Camarupim clusters offshore Brazil in the Espírito Santo Basin and the BM-ES-23 block as well as Saipem’s interest in the FPSO Cidade de Vitoria producing in the Golfinho field.
The transactions are “subject to fulfillment or waiver of conditions precedent with an expected closing and effective date in the first quarter of 2023,” BW Energy said June 23 in statements on its website. BW Energy plans to finance the deals with cash flow and existing liquidity.
The Golfinho field offers the global maritime company producing oil and gas assets, access to infrastructure and Brazil’s emerging gas market while also providing potential for infield development opportunities. The acquisition is in-line with BW Energy’s strategy to unlock proven oil and gas resources offshore by utilizing existing energy infrastructure to reduce development cost.
The acquisition will be accretive to BW Energy in terms production and reserves. Post-acquisition the company’s net production is expected to rise to nearly 17,500 bbl/d, while its 2P reserves are expected to rise to 212 MMboe, the company said.
“Golfinho offers material ongoing production and cash flow in Brazil at an attractive price with significant upside potential in near-field exploration and phased developments,” BW Energy CEO Carl K. Arnet said in a separate press statement. “It will diversify our production base, accelerate the build-up of the local operating organization and provide an established working relationship with Brazilian stakeholders ahead of the Maromba development,” he added.
For Rio de Janeiro-based Petrobras, which has suffered a CEO crisis in recent months, the deal aligns with its corporate strategy to divest non-core assets and focus on the prolific pre-salt region as part of its aim to maximize shareholder value.
Golfinho and Camarupim clusters
The first deal will see BW Energy pay $75 million to acquire a 100% operated working interest in the Golfinho and Camarupim clusters and the 65% working interest in the BM-ES-23 exploration block. BW Energy will pay an initial cash consideration of $3 million at signing and $12 million at closing and has also agreed to contingent payments after closing of up to $60 million linked to oil price and production volumes.
The amounts do not consider adjustments due until the closing of the transaction, which is subject to compliance with certain precedent conditions, such as the approval by the Administrative Council for Economic Defense and National Agency of Petroleum, Natural Gas and Biofuels, Petrobras said June 24 in a statement.
The Golfinho cluster includes the oil producing Golfinho field, the non-associated gas producing Canapu field, and the BM-ES-23 exploration block. The Camarupim cluster consists of unitized non-associated gas Camarupim and Camarupim Norte fields.
From January to May 2022, the Golfinho field produced 8,600 bbl/d of oil and 90,000 cu. m/d of gas. The other areas are not in production, Petrobras said. Partners in the BM-ES-23 block include PTTEP (20% working interest) and INPEX (15% working interest).
The Golfinho cluster offers BW Energy several proven low risk in-field development opportunities with short lead times and substantial potential long-term upside from proven gas accumulations, it said.
BW Energy estimates the clusters holds 38 MMboe of proven recoverable resources, mainly oil, of which 19 MMboe is developed and producing and 19 MMboe undeveloped. Additionally, the company has identified 0.7 Tcf of recoverable gas accumulations for potential future development.
In the second deal, BW Energy signed a memorandum of agreement to pay Saipem $73 million for the FPSO Cidade de Vitoria located in the Golfinho field offshore Brazil and operated for Petrobras. Approximately $25 million is due at the closing of the Golfinho transaction and $13 million is due at FPSO takeover and customs clearance, which is expected in 2023. The remaining $35 million will be paid in 18 monthly installments following the takeover.
The FPSO acquisition is subject to the closing of the Petrobras clusters acquisition and expected to take place in the first quarter 2023. Considering the terms of the Golfinho transaction, the current lease and operate contract between Saipem and Petrobras – set to expire in February 2023 – has been extended until the FPSO takeover, or June 2024, whichever comes first.
“Establishing a solid working relationship with Brazilian authorities and other stakeholders is key to a successful Maromba development. Having two operating assets in Brazil will create several synergies and make us an attractive local employer,” BW Energy’s Arnet added.
The FPSO Cidade de Vitoria is a flexible unit with storage capacity of 1.6 MMbbl. The unit can produce more than 100,000 bbl/d of oil and has additional capacity for gas production and compression.
The unit will allow BW Energy to efficiently increase production from the Golfinho cluster and provide oil and gas handling capacity to accommodate the upside from planned future developments. The unit will also allow BW Energy to reduce opex for the entire field, the company said.
BW Energy’s acquisitions of the Golfinho and Camarupim clusters and FPSO come on the coattails of a similar deal in April 2022. Then, the company revealed plans to proceed with the Maromba development project offshore Brazil in the Campos Basin and acquire the FPSO Polvo from BW Offshore for $50 million. The unit will be upgraded and redeployed on the field. Development plans are based on an initial three well drilling campaign with initial oil expected in 2025. A second campaign with three additional wells is slated for 2027.
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