UK-based oil and gas service provider Petrofac has entered into an agreement to sell the deepwater derrick lay vessel JSD6000 to Shanghai Zhenhua Heavy Industries (ZPMC).
The transaction comprises the sale of all JSD6000 related assets held by Petrofac, including the owner furnished equipment, for a gross consideration of $190m and a 10% interest in a new special purpose vehicle set up to own the vessel once commissioned.
Petrofac ordered for the vessel at ZPMC in 2014 and the contract was terminated in October 2015, with Petrofac saying it was reviewing its options.
Under the latest agreement, Petrofac will provide technical support for the construction of the vessel, which is expected to complete in 2022. Petrofac will not contribute to the cost of construction, commissioning or testing of the vessel.
The total consideration of $190m is offset by a net amount of $23m retained by Petrofac under the previous hull and marine contract with ZPMC. The remaining $167 million net cash consideration will be received in tranches.
Petrofac will use the proceeds from the sale to reduce gross debt.
“This agreement materially completes our disposal of the project, in line with our stated intention to exit the deep-water market. It is a further positive step in the execution of our stated strategy to focus on our core strengths, deliver organic growth and reduce capital intensity,” said Ayman Asfari, Petrofac’s group chief executive.
