Schlumberger and Ophir have terminated discussions over a move which could have given the oilfield services firm a 40% stake in the Fortuna floating LNG development offshore Equatorial Guinea.
Earlier this year, Schlumberger had reached a heads of terms agreement with Ophir over the project, shortly after signing a memorandum of understanding with floating LNG technology provider Golar LNG.
Following due diligence, Ophir and Schlumberger were unable to complete the transaction on the terms agreed in the heads of terms.
However, Ophir says the project is still moving forward, albeit with a delay. Engineering, procurement, construction, installation and commissioning contract bids having been received and forward upstream capex from final investment decision to first gas has been further reduced from US$600 million (gross) to $450-500 million (gross).
Ophir is also in discussions with a number of other parties over participation in and funding of the Fortuna FLNG project.
A development and production plan was submitted to MMIE on schedule and in accordance with the PSC in March 2016. But, Ophir says final investment decision (FID) is now due in Q4 2016, with first gas forecast for early 2020.
Nick Cooper, CEO at Ophir, said: "The Fortuna project workstreams are progressing towards FID. We have been reviewing a number of options and our discussions continue with other quality counterparties that can offer an attractive source of funding. In addition, the reduction in the capex to first gas has lowered the project breakeven oil price to approximately $40/bbl.
"We continue to work closely with Golar, the prospective offtakers and the other potential partners and remain confident that we will take the FID in 2016."
In a statement released by Golar LNG, the company reaffirmed that's Schlumberger's withdrawal from the Fortuna/Ophir development will not in any way influence the framework agreement which has been signed between Golar and Schlumberger.
The target of this framework agreement is to develop integrated solutions for stranded gas assets. Significant efforts have been put into this over the last months and the results have confirmed to both parties the commercial attractiveness and the technical viability of the FLNG concept as a solution for rapid modernization of stranded gas.
The partnership is currently exploring several specific opportunities.
Although a commercial agreement between Ophir and Schlumberger was not reached, Golar will independently continue to work with Ophir with the target to reach an FID for the Fortuna development this year.
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