Yinson hit with FPSO deal termination after Aker Energy defers Pecan project

Oil and gas company Aker Energy has postponed the development of its Pecan field, located offshore Ghana. As a result, Aker Energy terminated its agreement with Yinson for the provision of an FPSO for the project. 

Aker Energy’s plan was to develop the Pecan field with a purpose-built FPSO connected to a subsea production system at 2,400 meters below sea level.

With that in mind, Aker Energy last February entered into a Letter of Intent (LOI) with Yinson to award a bareboat charter and an operations and maintenance contract for an FPSO vessel at the Pecan field, which is located in the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana.

The contracts would have been for a firm duration of ten years followed by five yearly extension options exercisable by Aker Energy as the operator on behalf of the license partners Lukoil, Fueltrade, and Ghana National Petroleum Corporation (GNPC).

However, Malaysian FPSO provider Yinson said in an update on Wednesday that Aker Energy had terminated the LOI.

The FPSO was supposed to be located over and connect to the subsea production system located at approximately 2,400 meters below sea level. Together, this would form the fourth installation to produce oil and gas resources offshore Ghana.

The FPSO would have been Yinson’s second vessel to operate in Ghanaian waters, with the first being FPSO John Agyekum Kufuor, operating for Eni since 2017.

According to Yinson, the termination is due to the decision made by Aker Energy to postpone the activities under the DWT/CTP Petroleum agreement and the development of the project until further notice amidst the COVID-19 pandemic.

Yinson said it would preserve its right under the letter of intent for compensation due arising from the termination.