Vaalco Energy has signed a binding letter of intent (LoI) with World Carrier Offshore Services to provide a floating storage and offloading (FSO) vessel offshore Gabon.
Switching to an FSO, from a floating production, storage and offloading (FPSO) vessel, should save Vaalco $13-16 million per year, it said.
The operator had signed a non-binding LoI with Omni Offshore Terminals in April. This expired in June without an agreement being reached.
The agreement “will allow us to sustain our operational excellence and robust financial performance at Etame through 2030”, said Vaalco CEO George Maxwell. The FSO “costs almost 50% less than the current FPSO solution and will reduce our overall costs by approximately 17% to 20%”.
The total cost of conversion to an FSO will be $40-50mn gross, of which $26-32mn are net to Vaalco. This sum will be spread over 2021-22. It will save a gross amount of $20-25mn per year to 2030.
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