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BW Offshore books loss on Indonesian FPSO divestment

© Supplied by ShutterstockIndonesia flags flutter in the wind
Indonesia flags flutter in the wind

BW Offshore has signed a deal to sell its FPSO BW Joko Tole to a group of Indonesian companies that will free up cash to pursue other investments. However, the FPSO was sold at a loss.

BW Offshore has today signed an agreement for the sale of the FPSO BW Joko Tole to PT Bahari Inti Tanker and PT Cahaya Haluan Pasifik, both of which are Indonesian companies, in consortium with PT Buana Lintas Lautan Tbk, a company publicly listed in Indonesia. The consortium will continue to operate the FPSO under the lease contract with Kangean Energy Indonesia.

“The sale will free up over $50 million of liquidity, comprising of net sale proceeds of $42.5 million and the release of $9 million of working capital upon closing. There is no debt attached to the FPSO. The Company expects to book a loss from the transaction of around $23 million and a tax expense of approximately $12 million from the write-down of a related deferred tax asset. These non-cash items will be recorded in the accounts for the fourth quarter of 2021,” said BW.

“The transaction follows our strategy of optimising value from the non-core FPSO fleet, which includes divesting assets with marginal contracts close to end of the firm period, while progressing our transition to floating energy infrastructure investments,” said Marco Beenen, the CEO of BW Offshore. “We are pleased that the BW Joko Tole has found a new owner with a strong local connection which will continue to operate the unit in Indonesia.”

The transaction is subject to customary conditions precedent with closing expected late in the first quarter of 2022.

BW Offshore will provide transition services for a period of up to four months after closing to ensure safe and uninterrupted transfer of operations including the local organisation operating the FPSO to the new buyer. The BW Joko Tole is a gas producing FPSO operating on the TSB field offshore Indonesia.

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