BW Offshore, a provider of floating production services to the oil and gas industry, has signed an agreement to acquire 70% of the Maromba field offshore Brazil from Petrobras, for a total of $90m.
BW Offshore said that the completion of the present transaction is subject to the fulfilment or waiver of conditions, including approval by The Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) and deem the company as an approved operator in Brazil.
Maromba field is located offshore Brazil in the Campos Basin at approximately 160mts of water depth and estimates shows 100 to150 million barrels of potential recoverable resources of low-sulphur 16 API oil in Maastrichtian sandstone reservoirs.
The company said that eight of nine exploration and appraisal wells drilled so far have identified oil in multiple reservoirs, and 4 out of the 8 wells have defined and delineated the Maastrichtian sand targets.
According to the company, prior exploration data shows more than 1 billion barrels of oil in place upside potential and similar to recent appraisal campaigns at the Dussafu license offshore Gabon, the upside is expected to be later defined by further appraisal work post first oil.
Furthermore, the company intends to deploy one of its existing FPSOs to the field as part of a phased development to de-risk the project like at the Dussafu development.
BW Offshore CEO Carl K. Arnet said: “Maromba meets many of the criteria our E&P strategy is founded on; proven resources, high upside potential, located in a country where we currently operate, phased development and the use of one of our own FPSOs.
“We will pay approximately USD 1 per barrel of recoverable resources in an area we know well, and we are currently evaluating several development options within our phased development strategy that range from USD 3 to 7 of capital cost per recoverable barrel plus FPSO lease. Maromba has the potential to create significant value for the shareholders of BW Offshore.”
The company said that the transaction amount is to be paid over three installments as the development advances towards first oil. The first installment of $20m is expected in the second half of 2019, following the receipt of ANP approval as operator and formal sanction of the transaction.
The second installment of $20m is due at start of drilling activities and the third part-payment of remaining $50m, is due at first oil or 3 years after the start of drilling activities, whichever comes first.