Oil and gas exploration company Ophir Energy has terminated discussions with Schlumberger regarding the latter’s participation in Fortuna floating LNG project, offshore Equatorial Guinea.
The duo in January entered into a non-binding Heads of Terms Agreement whereby Schlumberger would get a 40% economic interest in the Fortuna FLNG project.
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According to Ophir’s statement on Friday, since the January 26, 2016 announcement of a non-binding Heads of Terms Agreement with Schlumberger for upstream participation, Schlumberger has completed its technical due diligence.
However, Ophir and Schlumberger have been unable to complete the transaction on the terms agreed in the Heads of Terms. As such, discussions between the parties have terminated, Ophir said.
Ophir noted that the Schlumberger agreement was one of several options being reviewed as a basis for development of the project.
After completion of the upstream FEED studies, and EPCIC bids having been received as planned earlier this month, the forward upstream capex requirement from FID to first gas has been further reduced from $600mm (gross) to between $450-500mm (gross).
Ophir stated it has remained in active discussions with a number of other parties with regards to participation in and funding of the Fortuna FLNG Project and these discussions include upstream equity participation, vendor financing and pre-sales of gas.
The company added that offtake selection has progressed to a decision between three alternative solutions and fully-termed LNG sales agreements were nearing completion. Negotiation of the mid-stream chartering agreement with Golar is near complete, the company also said.
Further, Ophir added, the Development and Production plan was submitted to MMIE on schedule and in accordance with the PSC in March 2016.
“In light of the additional time required to fully develop these options to reach binding agreements, we now expect to make FID during 4Q 2016 with first gas now forecast for early 2020,” Ophir said on Friday.
To remind, the company said in March that Fortuna FLNG FID would be made in mid-2016 .
Nick Cooper , Chief Executive Officer of Ophir, commented: “The Fortuna project workstreams are progressing towards FID. We have been reviewing a number of options and our discussions continue with other quality counterparties that can offer an attractive source of funding. In addition, the reduction in the capex to first gas has lowered the project breakeven oil price to approximately $40 per bbl.
“We continue to work closely with Golar, the prospective offtakers and the other potential partners and remain confident that we will take the FID in 2016.”
Fortuna sits within the Block R licence, offshore Equatorial Guinea, which is located in the south-eastern part of the Niger Delta complex. Ophir holds an 80% operated interest in Block R and GEPetrol holds 20% interest.
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Oil and gas exploration company Ophir Energy has terminated discussions with Schlumberger regarding the latter’s participation in Fortuna floating LNG project, offshore Equatorial Guinea. The duo in January entered into a non-binding Heads of Terms Agreement whereby Schlumberger would get a 40% econ
