Teekay Offshore Partners Buys FPSO Interest
Bermuda-based Teekay Offshore Partners L.P. has agreed to acquire a 50 percent interest in the floating production, storage and offloading [FPSO] unit from its sister company Teekay Corporation for a purchase price of approximately $204 million.
The acquisition will be financed with assumed debt and proceeds from the recently completed equity private placement. The acquisition is expected to be completed on June 1, 2013, subject to customary closing conditions.
The “Itajai” FPSO [pictured] is operating on the Bauna and Piracaba fields in the Santos Basin offshore Brazil under a nine-year fixed-rate time-charter contract — plus extension options — with Petroleo Brasileiro SA.
The remaining 50 percent interest in the “Itajai” FPSO is owned by Brazilian-based Odebrecht Oil & Gas S.A.
The partnership’s 50 percent interest in the “Itajai” FPSO unit, which will be equity accounted for, is expected to generate annual cash flow from vessel operations of approximately $25 million, and annual distributable cash flow of approximately $14 million.
“We are pleased to be completing another strategic FPSO acquisition, our second to-date in 2013, which will bring the Partnership’s total FPSO fleet size to five units,” commented Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC. “The ‘Itajai’ FPSO will add to our growing FPSO franchise in Brazil, where we currently own and operate two other FPSO units, and further builds on our strong relationship with Petrobras. In addition, the stable fixed-rate cash flow contributed from the ‘Itajai’
FPSO will be accretive to the Partnership’s distributable cash flow.”
The board of directors of the partnership’s general partner and its conflicts committee have approved the transaction. The conflicts committee retained independent legal and financial advisors to assist in evaluating the transaction.
Teekay Offshore Partners L.P. is an international provider of marine transportation, oil production and storage services to the offshore oil industry focusing on the fast-growing, deepwater offshore oil regions of the North Sea and Brazil.
Teekay Offshore is structured as a publicly-traded master limited partnership and owns interests in 35 shuttle tankers, five floating production, storage and offloading [FPSO] units, seven floating storage and offtake [FSO] units and five conventional oil tankers.
The majority of Teekay Offshore’s fleet is employed on long-term, stable contracts. In addition, Teekay Offshore has rights to participate in certain other FPSO and shuttle tanker opportunities provided by Teekay Corporation — which is headquartered in Bermuda — and Sevan Marine ASA.
