HOUSTON – VAALCO Energy has signed a binding letter of intent with World Carrier Offshore Services to provide and operate an FSO at the Etame Marin field offshore Gabon.
The arrangement lasts for up to eight years with additional option periods available following the expiry of the field’s current FPSO contract (Petróleo Nautipa) in September 2022.
Under the bareboat contract World Carrier will provide and operate the Cap Diamant, a double-hull crude tanker built in 2001, as an FSO. VAALCO expects this contract and the operating agreement to take effect following approval from the Etame partners, anticipated by early next month.
According to VAALCO, switching to the FSO will cut storage and offloading costs by almost 50%, and reduce overall operating costs at the field by up to 20% through 2030.
In addition, it increases storage capacity by over 50%, allowing for greater operational and lifting flexibility and reduced per barrel lifting costs, and should lead to an extension of the economic field life, in turn increasing reserves recovery.
VAALCO CEO George Maxwell said: “Current total field level capital conversion estimates are $40 to $50 million gross spread across 2021 and 2022. This capital investment is projected to save approximately $20 to $25 million gross per year in operational costs through 2030, giving the project a very attractive payback period of only two to two and a half years…
“We expect to have the FSO in place and operating in September 2022 prior to when our current FPSO contract expires.”
The opex savings are attributed to a more simplified processing system that avoids duplication of processing on the platforms and on the FSO. In addition, there should be either a reduced or no need for ongoing life extension costs, with a significant reduction in planned/unplanned downtime.