Brief Contract Extension for BW Offshore's FPSO in Gabon

FPSO-leasing specialist BW Offshore has secured a short-term contract extension for its Petroleo Nautipa FPSO.

The contract will see production extended from September 20 to October 4, 2022, ahead of demobilization. The spread-moored FPSO has been producing oil from Vaalco's Etame field offshore Gabon since 2002. According to World Energy Reports, the FPSO might be scrapped following the demobilization.

Worth noting, In 2021, BW Offshore recorded an impairment on the FPSO fleet of USD 90.5 million. The impairment reflected reduced probability of extension of current contracts, as well as a lack of redeployment opportunities after end of contract period for the more mature part of the FPSO fleet. Impairment charges were recognised on BW Athena, Espoir Ivoirien, Berge Helene, Sendje Berge, Joko Tole, Petróleo Nautipa and Umuroa.

Back to the Etame field, the soon-to-happen demobilization of the FPSO won't mean the end of production at the offshore oil field. 

To remind, Africa-focused oil firm VAALCO Energy in August last year signed an agreement with World Carrier Offshore Services Corp. for the provision and operation of a Floating Storage and Offloading (“FSO”) to be deployed at Etame, to replace the FPSO.

The contract, for the Cap Diamant vessel that was to be converted into an FSO, is for up to eight years, with additional option periods available.

VAALCO said that the FSO solution would decrease storage and offloading costs almost 50%, compared to the current FPSO solution, and lower total operating costs at Etame by approximately 17% to 20% through 2030.

Also, according to the oil company, the FSO solution increases effective capacity for storage by over 50%, allowing for greater operational and lifting flexibility and a material reduction in per barrel lifting costs.

The FSO is expected to lead to an extension of the economic field life, resulting in a corresponding increase in recovery and reserves at Etame, Vaalco said at the time.

Data source: World Energy Reports' August 2022 FPS report