Shipping Finance

SBM Offshore completes US$1.05 billion financing of FPSO Prosperity

Floater specialist back to debt market months after successful bond issuance

Dutch listed FPSO operator SBM Offshore (AMS:SBMO) has secured a project financing agreement with a consortium of 11 international banks for a total of US$1.05 billion. The Company expects to draw the loan in full, phased over the construction period of the FPSO.

The Prosperity FPSO will utilize a design that largely replicates the design of the Liza Unity FPSO. As such, the design is based on SBM Offshore’s signature “Fast4Ward” program that incorporates the Company’s new build, multi-purpose hull combined with several standardized topsides modules.

The FPSO will be designed to produce 220,000 barrels of oil per day, will have associated gas treatment capacity of 400 million cubic feet per day and water injection capacity of 250,000 barrels per day. The unit will be spread moored in water depth of about 1,900 meters and will be able to store around 2 million barrels of crude oil.

The financing will become non-recourse once the FPSO is completed and the pre-completion guarantee has been released. The project loan has a tenor of two years post completion, in line with the duration of the charter, and carries a variable interest rate plus 1.60%.

The project is part of the Payara development, which is the third development within the Stabroek block, circa 200 kilometers offshore Guyana. Esso Exploration and Production Guyana Limited, an affiliate of Exxon Mobil Corporation, is the operator and holds a 45% interest in the Stabroek block, Hess Guyana Exploration Ltd. holds a 30% interest and CNOOC Petroleum Guyana Limited holds a 25% interest. The Payara project targets an estimated resource base of about 600 million oil-equivalent barrels.

Fast4Ward standardized design. Image credits: SBM Offshore

SBM Offshore draws a large part of its revenue and backlog from Latin America, due to its exposure to the two most prolific offshore markets in the region. In addition to the FPSO Liza Destiny already deployed offshore Guyana, the company operates 7 FPSOs offshore Brazil.

A recent bond issuance was completed in February for refinancing one of them, the FPSO Cidade de Ilhabela. The US$850 million senior secured notes were rated Ba1 (Moody’s) and BB+ (Fitch) and priced at 5.198% fixed coupon, to be paid semi-annually over a 13.5-year term. They trade at the Singapore Stock Exchange (SGX).

Under the Company’s Fast4Ward program, the total number of floater hulls ordered to date stands at six. All four hulls already contracted are bound to South America: FPSOs Liza Unity (Exxon Mobil, Guyana, first oil expected for 2022), Sepetiba (Petrobras, Brazil, 2023), Prosperity (Exxon Mobil, Guyana, 2024) and Almirante Tamandaré (Petrobras, Brazil, 2024). The two remaining hulls are yet to find contracts.

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