Shell is to buy an FPSO connected to the world’s deepest oil and gas project in the US Gulf of Mexico.
The Stones development is located in around 2,900 metres 9,500 feet of water
Production in September 2016 from a floating production, storage and offloading (FPSO) facility.
The FPSO connects to subsea infrastructure which produces oil and gas from reservoirs nearly 30,000 feet below sea level.
Shell is exercising its right under the charter agreement to purchase the FPSO Turritella.
The purchase allows a Shell affiliate to assume operatorship of the Stones development in its entirety.
The transaction is expected to close in early 2018.
The company selling the asset is a joint-venture (JV) owned by SBM Offshore with 55% interest, Mitsubishi Corporation with 30% interest and Nippon Yusen Kabushiki Kaisha (NYK Line) with 15% interest.
The transaction comprises a total cash consideration to the JV of c. $ 1 billion.
The net divestment proceeds, after taking into account the unwinding of the JV ownership and partner commitments, will primarily be used for project finance redemption and as such will decrease SBM Offshore’s proportional net debt position.
The award winning FPSO Turritella has been on hire since September 2, 2016 and forms an early phase in Shell’s Stones development in the Gulf of Mexico.