BW Energy Gabon (BWE), a subsidiary of BW Offshore, has announced the signing of an agreement with Gabon Oil Company (GOC) for the acquisition of a 10% interest in the Dussafu production sharing contract.

BW offshore

Image: BWE is the operator of the Dussafu license. Photo courtesy of rawpixel/Pixabay.

The transaction is subject to the fulfilment of certain conditions precedents, including approval from the government of Gabon and involves a payment by GOC of $28.5, It represents a reimbursement equivalent to 10% of development and production costs from April 2017 and to-date. BWE is the operator of the Dussafu license.

BW Offshore CEO Carl K. Arnet said: “We are very pleased to welcome GOC as a partner in the Dussafu licence. We are about to commence the next exciting phase of the development to increase oil production and identify additional reservoirs which will support long-term value creation from the Dussafu license.”

GOC’s interest is expected to be retroactive from the date of first oil on 16 September 2018, and GOC would assume 10% of historical costs as authorized by the government of Gabon.

BW Offshore, in a statement, said: “GOC will contribute to cash calls for the development and production of the field and adhere to the joint operating agreement and lifting arrangements that are currently in force between the contracting parties.”

BWE’s interest is expected to be reduced to 81.667% and Panoro would continue to hold 8.333%. Tullow Oil Gabon has exercised its back-in right to the Dussafu license.

Once the transaction is completed, the interests of BWE, Panoro, GOC and Tullow  in the production sharing contract would be 73.5%, 7.5%, 9% and 10% respectively, as per previous announcement.

In February 2017, Panoro Energy signed a definitive sale and purchase agreement (SPA) with BW Energy Gabon to sell 25% working interest in Dassafu production sharing contract in Gabon for a cash consideration of $12m.

BW Offshore is a major provider of floating production services to the oil and gas industry. It also participates in developing proven offshore hydrocarbon reservoirs. With a fleet of 15 owned FPSOs, BW Offshore is represented in all major oil and gas regions in the world.