VAALCO Gabon has signed a binding letter of intent (‘LOI’) with World Carrier Offshore Services Corp to provide and operate a Floating Storage and Offloading (‘FSO’) unit at VAALCO’s Etame Marin field offshore Gabon for up to eight years, with additional option periods available after the current Floating Production, Storage and Offloading (‘FPSO’) contract expires in September 2022.

Compared to the current FPSO solution, the LOI reduces storage and offloading costs by almost 50%, lowers total operating costs at Etame by approximately 17% to 20% through 2030, increases effective capacity for storage by over 50%, allow for better operational and lifting flexibility and a material reduction in per barrel lifting costs and it is to lead to an extension of the economic field life, resulting in a corresponding increase in recovery and reserves at Etame;

VAALCO’s Chief Executive Officer, George Maxwell, said: “We are very pleased to finalize an agreement with World Carrier that will allow us to sustain our operational excellence and robust financial performance at Etame through 2030. Additionally, this new solution costs almost 50% less than the current FPSO solution and will reduce our overall costs by approximately 17% to 20%. Current total field level capital conversion estimates are $40 to $50 million gross ($26 to $32 million net to VAALCO) spread across 2021 and 2022. This capital investment is projected to save approximately $20 to $25 million gross per year ($13 to $16 million net to VAALCO) in operational costs through 2030, giving the project a very attractive payback period of only two to two and a half years.”

To read the full details of the binding letter of intent for FSO at the Etame Marin Block in the Congo Basin, Offshore Gabon, CLICK HERE