Odebrecht Oil and Gas and Teekay Offshore Partners L.P. (joint-venture) signed, last Friday (31), a financing agreement with international banks in order to build the first FPSO (“Floating Production Storage and Offloading”) for the Libra block, named FPSO Libra Pioneer. The financing agreement, with a total value of $803.7 million, is a long-term project financing with limited recourse and a repayment schedule over 10 years beginning at the commencement of commercial operations.
"The FPSO Libra Pioneer is a milestone for Brazilian oil production and we are proud to support this project with our technical and financial capabilities. Given the current credit situation in the global economy, the fact that we secured this financing reinforces our strong relationship with major banking institutions, which is built on our reputation and the availability of guarantees and liquidity", said Rogério Ibrahim, Financial Director for Odebrecht Oil and Gas.
Construction of the FPSO Libra Pioneer began in late 2014 at the Jurong shipyard in Singapore and during June 2015 the ship conversion was already under way, as well production of the the modules. The unit will be operated by the joint-venture for an Extended Well Test Unit in the Brazilian pre-salt region, for a 12 year period, for Libra Consortium, which includes Petrobras (40%), Total (20%), Shell (20%), CNPC (10%), and CNOOC (10%).
The FPSO will be able to operate in depths of up to 2,400 m, while producing 50,000 barrels of oil per day and compressing 4,000,000 m³ of gas per day. The Libra Block covers 1,548 m² in the Santos Basin and holds reserves between 8 and 12 billion barrels of recoverable oil, according to the National Oil Agency (ANP).
Odebrecht Oil and Gas has long been successful in obtaining finance from private financial institutions and credit agencies, as well as issuing bonds. Since 2006, when company operations began, Odebrecht Oil and Gas has pushed forward with construction of its fleet and has been able to count on credit from banking syndicates. In 2010, it refinanced its assets via the capital markets and attracted a number of international awards for its operations, which are significantly attractive for US investors, who account for almost 70% of the company's bond purchases.
In October 2010, Odebrecht Oil and Gas issued its first bonds to refinance the NORBE VIII and NORBE IX, which were originally built using bank finance. Maturing in 2021 and with biannual amortization, the transaction raised $1.5 billion and attracted 240 investors from around the world.
The company repeated this achievement in August 2013, issuing bonds to finance additional high-performance assets: the ODN I, ODN II and NORBE VI platforms. This transaction, maturing in 2022 and with quarterly amortization, refinanced $1.69 billion and received bids from over 200 qualified investors. In February 2014, the company decided to launch a new series for its 2013 bonds, including an additional asset in its fleet: the ODN Tay IV. This transaction, the first of its kind in the oil and gas industry, was launched in February 2014 raising $560 million and attracted over 330 global investors.
After successfully concluding these three transactions, in 2014 Odebrecht Oil and Gas decided to proceed with its first perpetual corporate bond issue in June (first round) and July (second round), managing to raise $550 million via the non-maturing bonds. The transaction, which attracted over 400 investors, saw the largest proportion of European investors (48%).
Innovation and awards
Creativity and vision, combined with accurate market intelligence, have been the perfect ingredients for Odebrecht Oil and Gas, a frequent issuer that is committed to the capital markets and a well-known offtaker, resulting in a number of awards for its various bond issues over the years.
The transactions, rated investment grade by the main credit rating agencies, were classified as "Deal of the Year" by number of specialised international publications, such as World Finance Magazine, Marine Money, International Awards Americas Oil&Gas and Latin Finance. This recognition is proof of our solid structure and the scale of demand is evidence of the benefits for the parties involved.
To survive in a capital-intensive industry, Odebrecht Oil and Gas needs to diversify its sources of finance and recycle capital in order to stay true to its sustainable growth commitment and ensure its investors are able to benefit from risk mitigation through amortizable structures, a portfolio of latest generation assets, an experienced operating team and highly attractive yields.
About Odebrecht Oil and Gas
The only privately held Brazilian company to offer integrated solutions for the entire upstream sector, Odebrecht Oil and Gas has a large portfolio of vessels and the largest Brazilian and seventh largest global offshore drilling fleet for ultra-deep waters. Odebrecht has been a service provider to the Brazilian oil industry since 1953 and in 2006 it started to concentrate its oil and gas investments in a new company: Odebrecht Oil and Gas. The company has a fleet of seven drilling platforms capable of operating in ultra-deep waters, three production vessels (FPSOs), two of them belonging to the joint-venture with Teekay Offshore, and two submarine cable laying ships (PLSVs) in partnership with Technip. The Odebrecht Organization holds an 81.43% stake in Odebrecht Oil and Gas. The remaining shares in the company are held by Temasek Holdings, an investment vehicle controlled by the Singapore government which became an OOG shareholder in 2010. For further information, please visit www.odebrechtoilgas.com.