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May 23, 2019

BW Offshore to spin off exploration and production company

BW Offshore has announced plans to establish its exploration and production (E&P) subsidiary BW Energy as a separate company.

By Umar Ali

Norwegian floating production storage and offloading (FPSO) vessel group BW Offshore has announced plans to establish its exploration and production (E&P) subsidiary BW Energy as a separate company.

As a subsidiary, BW Energy was established in late 2016 and has developed a portfolio of upstream oil and gas assets in Brazil and West Africa.  The newly-separated E&P company will also have a diversified portfolio of development and production assets, supported by BW Offshore’s existing FPSOs and positioned for growth based on a “unique low-risk development strategy”.

BW Energy will consist of a 100% working interest (WI) in the Maromba field offshore Brazil, a 73.5% WI in the Dussafu Marin permit offshore Gabon and a 56% WI in the Kudu licence offshore Namibia.

BW Offshore will invite external investors into BW Energy to finance investments at the Dussafu Marin permit and developments at the Maromba field.

Current gross production from the Dussafu field is around 12,000 barrels of oil per day (bopd), with four new production wells expected to increase this production to 20,000 bopd in 2020.

Gross internal recoverable reserves at Dussafu are estimated to be around 80 million barrels of oil equivalent (MMboe), with further material upside potential through exploration and appraisal opportunities in the field.

BW Offshore plans to transfer its rights to interests in the Maromba field to BW Energy, expanding the E&P company’s portfolio. Following the transfer, BW Energy will start development of the Maromba heavy oil discovery, which is expected to yield 100-150 MMboe.

BW Offshore also plans to transfer its interest in the Kudu licence to BW Energy, with all of BW Offshore’s upstream oil and gas assets being held through the E&P company.

BW Offshore CEO Carl Arnet said: “With BW Energy, we have demonstrated our unique ability to move the threshold for commercial development of discovered resources through use of existing FPSOs, fast-track project execution and properly scaled development concepts.

“We will continue to target robust business opportunities based on proven reserves with sequential growth potential and unlock significant value that traditional oil & gas companies are not addressing.

“We have proven the attractiveness of our field development strategy with the Dussafu development. Our E&P activities now have a scale where it is natural to invite external investors to add to BW Energy’s project execution capacity and growth potential.”

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