Euronav NV announces that it has become the full owner of the FSO platform as previously held in its 50-50 joint venture with International Seaways, Inc. (“INSW”). The two converted ULCCs, the FSO Asia and FSO Africa, were purchased at USD 300 million in total. Net of adjustments for working capital and debt, Euronav paid approximately USD 140 million in cash for the purchase. The transaction has been approved by North Oil Company (“NOC”), the operator of the Al Shaheen field, whose shareholders are Qatar Petroleum Oil & Gas Limited and Total E&P Golfe Limited. The Company obtains full control of the project.
The floating offshore units FSO Africa and FSO Asia were significantly converted from ULCC status and have been serving the Al-Shaheen field without interruption since 2010. The current contract for these two custom-made units with a capacity of 3 million barrels runs until Q3 2022. Following this, they will switch to a new contract that was agreed with NOC in 2020. This contract covers a ten-year extension for the FSO Asia and the FSO Africa in direct continuation of their current contractual service until Q3 2032.
Both Euronav and INSW are now following strategies which both believe require a different ownership structure for these world class assets. This highly amicable decision will allow both parties to pursue these strategies with more focus.
Hugo De Stoop, CEO of Euronav said: “This represents an important strategic milestone for Euronav and allows us to provide in full a significant source of long-term earnings visibility for our shareholders. Euronav has for many years maintained operational control of these assets and it makes sense now for us to assume full economic control. International Seaways has been a strong and reliable partner since 2008 and we are grateful for their support. These operational units have already provided substantial value to our customer since 2010 and the long-term contracts reflect Euronav’s operational capability in diversifying activities beyond the traditional crude oil transportation sector and generating superior returns on capital.”
“Our participation in the FSO joint venture with Euronav has provided stable cash flows for more than 11 years for International Seaways and its predecessor,” commented Lois K. Zabrocky, President and CEO of International Seaways, Inc. “For the past several months, we’ve evaluated options to unlock the value of the joint venture in cash in order to further strengthen our balance sheet and support our long-term value creation strategy, which, over the last five years, has included a transformational merger and vessel purchases at cyclical lows, maintaining a strong balance sheet and returning nearly USD 100 million in capital to shareholders since the start of 2020. We thank Euronav for their partnership, and we are confident that they will continue to operate these vessels with the highest standards.”
Source: Hellenic Shipping News