Shell buys FPSO Turritella for $1 billion

Shell has exercised its option to buy SBM Offshore’s FPSO Turritella, which is being used to produce oil from Shell’s Stones field in the U.S. Gulf of Mexico.

According to a statement by SBM Offshore, the acquisition allows Shell to assume operatorship of the Stones development in its entirety, creating additional efficiencies through integration of sub-sea to surface operations and allowing leverage of its optimized Gulf of Mexico organization and infrastructure.

The transaction is expected to close in early 2018, which provides for a transition window to ensure a safe and controlled handover of operations.

Also worth noting, the company which is selling the asset is a joint-venture (JV) owned by SBM Offshore with 55% interest, Mitsubishi Corporation with 30% interest and Nippon Yusen Kabushiki Kaisha (NYK Line) with 15% interest.

The transaction comprises a total cash consideration to the JV of around $1 billion. The net divestment proceeds, after taking into account the unwinding of the JV ownership and partner commitments, will primarily be used for project finance redemption and as such will decrease SBM Offshore’s proportional net debt position.

The FPSO Turritella has been on hire since September 2, 2016 and forms an early phase in Shell’s Stones development in the Gulf of Mexico.

The Stones development is located in 2,896 meters (9,500 feet) of water approximately 320 kilometers (200 miles) offshore Louisiana in the Walker Ridge area.

FPSO Turritella is the deepest FPSO development in the world and has a turret with a disconnectable buoy allowing it to weathervane in normal conditions and disconnect from the FPSO upon the approach of a hurricane.

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