Oil tanker operator International Seaways has sold its 50% stake in two floating storage and offshore (FSO) vessels, the FSO Asia and FSO Africa, to its joint venture partner Euronav NV.
The purchase price values the two FSO vessels at $300 million in total. Net of adjustments for working capital and expenses, International Seaways received approximately $140 million in cash from the sale.
The transaction has been approved by North Oil Company (“NOC”), the operator of the Al Shaheen offshore oil field in Qatar, whose shareholders are Qatar Energy and Total E&P Golfe Limited. The two FSO vessels have been serving the Al Shaheen field without interruption since 2010.
“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.
He said: “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 $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.”
According to Euronav, 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.
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