Murphy Oil, through one of its subsidiaries, has agreed to acquire the BW Pioneer floating production storage and offloading (FPSO) vessel from BW Offshore for $125m.
The consideration includes a provisional $100m instalment scheduled upon the FPSO’s delivery, expected by the conclusion of Q1 2025. The balance will be settled once specific contractual requirements are fulfilled, anticipated before Q2 2025 ends.
BW Offshore, which is a Norway-based provider of floating production solutions, will transfer ownership upon the completion of its current contract term on 18 March 2025.
The final payment will be processed once the vessel secures its full-term classification certificate, covering its operational period from 2025 to 2030. Certification is expected by the second quarter’s close.
BW Offshore CEO Marco Beenen said: “The divestment is in line with our strategy of capturing value from the existing FPSO fleet. We are pleased to ensure continuity for BW Pioneer and our experienced team, while also meeting our client’s need for a more flexible operating model.
“The transaction strengthens our financial position and supports execution of our long-term growth strategy of developing floating production infrastructure projects and energy transition solutions.”
Before the transition, the two companies plan to establish a five-year reimbursable operations and maintenance (O&M) contract, ensuring BW Offshore continues providing operational and maintenance services.
Murphy Oil president and CEO Eric Hambly said: “By acquiring the FPSO and restructuring our contract, we will achieve a material reduction in operating costs of nearly $60m annually with a payback of about two years independent of oil price, while enhancing returns for future infield development and exploration and increasing net proved developed reserves by approximately eight million barrels of oil equivalent.”
The BW Pioneer, converted at Keppel Shipyard in 2009, was the first FPSO authorised for deployment in the Gulf of America. The vessel, which has a storage capability of roughly 600,000 barrels and can process 80,000 barrels per day, has been integral to offshore production activities in the region.
Since entering service, it is said to have demonstrated advanced capabilities, including its first-ever disconnect operation in August 2020 to navigate extreme weather conditions.
The FPSO will maintain its current location, continuing operations at the Cascade (Walker Ridge 206 and 250) and Chinook (Walker Ridge 469 and 425) fields. In March 2020, BW Offshore secured a five-year contract extension for the vessel.
