Malaysia’s Yinson Production has entered into a heads of terms (HoT) agreement on the supply of a floating production, storage and offloading (FPSO) unit for Nigeria’s Oil Mining Licences (OMLs) 83 and 85. The Malaysian company said the HoT was signed on June 13, saying it had been struck with a West African affiliate, Yinson Operations & Production West Africa and First Exploration and Petroleum Development.
The deal sets the stage for exclusive negotiations on the supply and charter of a unit, which would take hydrocarbons from the Anyala and Madu fields. The parties have agreed to try and conclude negotiations on the FPSO by June 30.
According to a regulatory filing from Yinson, the award would include a bareboat charter and an operation and maintenance (O&M) agreement. The initial term of work would be for seven years, with First E&P having an option for an eight-year extension.
The Malaysian company did not disclose the proposed size of the vessel, which would work in shallow water, around 40 km offshore. The Nigerian company struck a deal with Schlumberger, and Nigerian National Petroleum Corp. (NNPC), on developing the two fields in June 2017. At that time, the companies said production would go to an existing FPSO, providing 50,000 bpd of oil and 3.4 mcm per day of gas.
The deal was innovative in that Schlumberger agreed to provide services and capital, until first oil was achieved. The total cost was estimated at US$700 million.
The Anyala and Madu fields hold total discoveries of more than 450 million barrels and 22.7 bcm. First E&P is the operator, with a 40% stake, while NNPC has the remaining 60%. First E&P bought its interest in early 2015, from Chevron. At that time, the Nigerian company said production would begin in the third quarter of 2016.
In mid-2017, the companies said a final investment decision (FID) was expected in December 2017, with first oil in 2019.