12 March 2025
BW Offshore has signed an agreement for the sale of the FPSO BW Pioneer for USD 125 million to a subsidiary of Murphy Oil Corporation, the operator of the Cascade & Chinook field. The transaction includes an initial payment of USD 100 million upon delivery of the FPSO at the end of the current contract period, 18 March 2025, followed by the remaining balance upon receipt of the full-term class certificate for the period 2025-2030, expected before end of Q2.
The two parties plan to sign a five-year reimbursable O&M contract ahead of 18 March, under which BW Offshore will continue to provide operations and maintenance services for a period of five years.
“The divestment is in line with our strategy of capturing value from the existing FPSO fleet. We are pleased to ensure continuity for BW Pioneer and our experienced team, while also meeting our client’s need for a more flexible operating model,” said Marco Beenen, the CEO of BW Offshore. “The transaction strengthens our financial position and supports execution of our long-term growth strategy of developing floating production infrastructure projects and energy transition solutions.”
BW Pioneer’s journey began in 2009 when BW Offshore completed conversion at Keppel Shipyard. With a storage capacity of about 600,000 barrels of oil and a processing capacity of 80,000 barrels per day, it has proven to be a cornerstone of efficient offshore production. The BW Pioneer’s stellar performance and reliability were recognised on March 18, 2020, when BW Offshore secured a five-year contract extension for the unit. Over the years, BW Pioneer has consistently demonstrated its advanced capabilities. In August 2020, BW Pioneer successfully executed its first-ever disconnect operation to evade an oncoming hurricane, showcasing its advanced safety features and adaptability to extreme weather conditions.
Murphy Oil Corporation separately announced that the company is reaffirming its 2025 capital expenditure (CAPEX) guidance range of $1,135 million to $1,285 million, with first quarter CAPEX reaffirmed at $425 million.
The FPSO will remain at its current location, supporting operations at the Cascade field (Walker Ridge 206 and 250) and Chinook field (Walker Ridge 469 and 425) in the Gulf of America. BW Offshore will continue to provide operations and maintenance services under a new five-year reimbursable contract.
“I am pleased to announce this value-creating transaction with BW Offshore, a top FPSO operator with a strong safety culture, and I look forward to continuing our partnership. By acquiring the FPSO and restructuring our contract, we will achieve a material reduction in operating costs of nearly $60 million annually with a payback of about two years independent of oil price, while enhancing returns for future infield development and exploration and increasing net proved developed reserves by approximately 8 million barrels of oil equivalent. It is also important to note that the purchase price was included in our 2025 capital expenditure guidance range of $1,135 million to $1,285 million,” said Eric M. Hambly, President and Chief Executive Officer. “Further, the FPSO is located in the prolific Wilcox trend, allowing for operated and non-operated exploration prospects to tie back to a cost-advantaged facility.”
The first FPSO approved for operations in the Gulf of America, the BW Pioneer has been in service since its conversion in 2009. The vessel has a storage capacity of approximately 600,000 barrels of oil and processing capacity of approximately 80,000 barrels of oil per day.
