Guyana’s oil ships to help SBM pocket billions in leasing fees this year

Aug 08, 2022 News

– company set to rake in record-breaking US$9B

Kaieteur News – SBM Offshore, the Dutch shipbuilder for Guyana’s floating, production, storage and offloading (FPSO) vessels said its leasing and operating revenue for the first half-year of 2022 increased to US$854 million from US$752 million in the year ago.

The company said this reflects mainly: the Liza Unity (FPSO) joining the Guyana fleet during the first quarter 2022, increased operating service scope for the Liza Destiny (FPSO), and the extension of a lease for the FPSO Kikeh in Malaysia. Given the foregoing performance, SBM said it expects to deliver around US$9 billion net cash flow from its Lease and Operate contracts for the remainder of the year. Additionally, SBM said its market outlook for new FPSOs remains positive as the world requires energy which is not only sustainable, but also affordable and reliable. This is what the company said it is delivering through its competitive Fast4Ward® FPSOs, which are also characterized by low emissions intensity. The company also has a line of sight for several other Guyana ships, thereby allowing for a substantial revenue flow for more than 20 years.

LEASING ARRANGEMENTS

Kaieteur News understands that the Liza Destiny (FPSO) contract covers the basic contractual term of 10 years of lease and operate. The Liza Unity (FPSO) and Prosperity (FPSO) contracts cover a maximum period of lease and operate of two years, within which the FPSO ownership and operation will transfer to the client, ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL). The ONE GUYANA FPSO which will serve the Yellowtail Project in the Stabroek Block has a contract that covers a maximum period of lease and operate of two years, within which the FPSO ownership and operation will transfer to the client.

OVERALL PORTFOLIO

On the overall project portfolio, SBM said strategic mitigating measures against inflation have been proving effective on controlling cost and protecting schedule on. Nevertheless, the company said parts of the portfolio remain sensitive to the pressure in the global supply chain and impact from COVID-19 pandemic. To achieve its goal of net-zero by 2050, the Dutch firm said it has established the following intermediate targets: by 2030, a target net-zero scope 1 and 2 emissions; a 50% reduction in scope 3 greenhouse gas intensity; and zero routine flaring in its fleet. The company also reported seeing good progress under its emissionZERO® programme which aims to have a near-zero emissions FPSO available to the market by 2025.

In respect to new energies and services, the company said it is developing products and services compatible with its net-zero roadmap. It was keen to note that the orderly transition from fossil to renewable energy will require companies to design and develop innovative solutions combined with the capability to reliably execute, finance and operate them.

At the same time, SBM said the transition will require maintaining discipline in providing value to all stakeholders with a particular focus on profitability and appropriate risk allocation. As an energy transition company, SBM categorically stated that it is well positioned to support, make a difference and benefit from multiple pathways in the growing energy transition market.

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