Global floating production services provider BW Offshore has confirmed a one-year extension for the lease and operation of the FPSO Petroleo Nautipa on the Etame field offshore Gabon for VAALCO Energy.
BW Offshore, which owns a fleet of 15 floating production, storage and offloading units (FPSO), said the firm period for the FPSO Petroleo Nautipa has been extended to third quarter of 2021, although there is a clause in the contract with options to stretch the extension further to third quarter of 2022.
BW Offshore took 100% possession of FPSO Petroleo Nautipa almost five years after signing a $49.3 million sale and purchase agreement with another leading FPSO service providers Yinson Holdings Berhad. The FPSO was previously 50/50 owned between the two companies through their respectively wholly owned Norwegian subsidiaries.
The agreement also involved a $10 million consideration for working capital in Tinworth Pte Ltd, a Singapore-based firm involved in chartering of ships, barges and boats with crew and a bit of ship management services.
The extension of the firm charter contract until the third quarter of 2021 comes at a time when VAALCO Energy has announced mixed production trend at the Etame field during the second quarter of 2019 with the Etame 4H well yielding an average of approximately 350 BOPD gross (95 BOPD net to the company) before it stopped production in July 2019.
“VAALCO is currently undertaking a technical analysis of remedial work with a view to reestablishing production,” the company told shareholders in its latest performance update.
VAALCO had separately confirmed temporal inability to restore production at the N. Tchibala 2H well after the company performed an acid simulation on the well triggering constrained natural flow. The well’s production had averaged 420 BOPD gross (113 BOPD net to VAALCO).
However, VAALCO is planning “to perform additional work to restore production” at a later date.
Meanwhile, in the third quarter of 2019, VAALCO’s scheme of works includes “planned maintenance turnaround for the Etame Marin FPSO and platforms which includes an approximate eight-day full field shut down which will impact third quarter production.”
“Taking into consideration the combination of the planned turnaround as well as the impact of deferred production from the two wells that are not producing, the company expects average production for the third quarter of 2019 to be between 3,000 BOPD and 3,300 BOPD net to VAALCO,” it said.
Elsewhere in Gabon, BW Offshore has another FPSO in operation, BW Adolo, which was formerly known as Azurite and which commenced operations in September 2018 on the Dussafu field offshore the West Africa country where production commenced in September 2018 with output from Tortue being “in line with expectations from the current two-well development.”
For BW Offshore, the extension of the lease and operate contract for FPSO Petroleo Nautipa strengthens the company’s outlook for the future of the FPSO lease and operations market globally.
The company predicts further growth in the segment on account of increased offshore spending and higher oil price, which it says “continue to provide extension opportunities”.
A few weeks ago, BW Offshore, which boasts more than 30 years of production track record in which period it executed 40 FPSO and FSO projects, announced signing of an extension agreement for Abo FPSO with Nigerian Exploration Ltd, a subsidiary of Eni SpA until the end of fourth quarter of 2019 with the option of further extension to fourth quarter of 2020.
The company has recently told shareholders and partners of its vessels’ “strong performance with 99% average uptime over the last five years.”