BW Offshore’s Brazilian FPSO deal falls through as Shell puts investment decision on ice
Norway’s BW Offshore is set to have its limited notice to proceed on Gato do Mato floating production storage and offloading (FPSO) vessel terminated after UK supermajor Shell put off the final investment decision (FID) on the oil and gas field development offshore Brazil by up to two years.
In May, BW Offshore secured a limited $50m notice to proceed for early-stage FPSO engineering, after which Shell was expected to award a lease and operate contract to a consortium in which the company is partnered by Italy’s Saipem. The deal was recently extended until February 2023.
However, the Oslo-listed floater specialist said in a regulatory filing that it had been advised by Shell Brasil that the FID would not be made within the next 12 to 24 months and that a formal notification terminating the limited notice to proceed is expected in due course. The company added that it would be reimbursed for costs incurred in line with the agreed terms.
BW Offshore and Saipem would have been jointly responsible for the engineering, procurement, construction, and installation (EPCI) of the FPSO, with expected delivery in 2026. The FPSO lease and operating contract was expected to have a firm term of 18 years with seven years of options.
