Schlumberger pulls out of Fortuna FLNG discussions

Offshore staff

LONDONOphir Energy and Schlumberger have terminated a non-binding heads of agreement signed in January concerning the Fortuna FLNG project offshore Equatorial Guinea.

Schlumberger has completed its technical due diligence, but the two parties were unable to complete the transaction on the terms agreed.

Ophir points out that this was one of several options under review for the project and development work continues.

Following completion of the upstream front-end engineering and design (FEED) studies, EPCIC bids are in and the forward upstream capex requirement from the final investment decision (FID) to first gas has come down further from $600 million to $450-500 million, lowering the project breakeven oil price to around $40/bbl.

Ophir is in discussions with other parties concerning participation in and funding of the project, notably on upstream equity participation, vendor financing, and pre-sales of gas.

Offtake selection has progressed to a choice of three alternative solutions, while fully-termed LNG sales agreements and negotiation of a mid-stream chartering agreement with Golar are both nearing completion.

Last month Ophir submitted a development and production plan to Equatorial Guinea’s government. It now expects to take the FID this fall, allowing first gas to be produced in early 2020.

04/29/2016

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