SBM Offshore and Malaysia’s MISC in deals to ‘streamline’ FPSO ownership
Share purchase agreements signed for Espirito Santo FPSO in Brazil and Kikeh FPSO in Malaysia
SBM Offshore and Malaysia’s MISC have signed two share purchase agreements covering a pair of floating production storage and offloading vessels operating in Brazil and Malaysia.
Currently, the two companies jointly own the Espirito Santo and Kikeh FPSOs in Brazilian and Malaysian waters.
However, under the just-signed agreements, SBM will secure 100% control of the Brazilian unit, while MISC will gain full control of the Malaysian vessel.
The first agreement involves SBM’s buying MISC Berhad’s "entire effective equity interest” in the lease and operating entities related to the Espirito Santo FPSO in Brazil, the Dutch company said in a statement released on the Euronext stock exchange on Friday.
The second deal comprises “the full divestment, to MISC Berhad, of SBM Offshore’s effective equity interest” in the lease and operating entities of the Kikeh FPSO in Malaysia, said SBM.
The Dutch company said the transaction furthers its efforts “to maintain focus and excellence in its operating portfolio”.
“Agreements remain subject to several conditions precedent and approval by various competent authorities,” the company added.
MISC, in its announcement on the Kuala Lumpur Stock Exchange on Friday, said the transactions are in line with its goal of streamlining business activities "by having full operational control of strategic assets within its portfolio".
Completion of the deal, said the Malaysian player, is currently targeted for January 2025.
The financial terms of the transactions and the stakes held in the floaters by other players were not disclosed by SBM, but were noted by MISC in its announcement on the Kuala Lumpur Stock Exchange on Friday.
MISC said it has a 51% stake in the Kikeh vessel, with SBM on 49%, while the positions are reversed in Brazil, with SBM holding a 51% in the Espirito Santo unit and MISC controlling 49%.
In 2020, SBM confirmed it had signed an agreement with Shell to extend the lease of the Espirito Santo from December 2023 to December 2028.
The Kikeh FPSO is operated by a joint venture between MISC and SBM, dubbed Malaysian Deepwater Floating Terminal (MDFT).
In 2022, MDFT entered into an agreement with PTTEP Sabah Oil to extend the Kikeh FPSO’s charter for six years from January 2022 to January 2028, MISC earlier noted.
The Kikeh FPSO is located in Block K offshore Sabah, East Malaysia, with MISC and SBM holding stakes of 51% and 49% in MDFT, respectively.
Built in 2007, the Kikeh FPSO is the first and largest deepwater FPSO in Asia.
It can produce 120,000 barrels per day of oil and has storage capacity of 2 million barrels of crude.
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