Project Financing for FPSO Operation Project of Tartaruga Verde and Tartaruga Mestica Oil Fields in Brazil
Supporting Offshore Resource Development Business and Strengthening International Competitiveness of Japanese Companies

  • Area: Latin America and the Caribbean
  • Marine and Aerospace
  • Energy and Natural Resources
  • [Project Finance]
  • Overseas Investment Loans


September 10, 2015
  1. The Japan Bank for International Cooperation (JBIC, Governor, CEO: Hiroshi Watanabe) signed today a loan agreement in the aggregate amount of up to about USD252 million (JBIC portion) with Tartaruga MV29 B.V. (TARMV29), a company incorporated in the Netherlands in which MODEC, Inc. (MODEC), Mitsui & Co., Ltd., Mitsui O.S.K. Lines, Ltd., and Marubeni Corporation have equity stakes. The loan, provided as project financing*1, will support a project in which a long-term FPSO*2 system chartering service will be offered by TARMV29 to Petróleo Brasileiro S.A. (Petrobras), a state-owned oil company in Brazil, for the development of the Tartaruga Verde and Tartaruga Mestica oil fields*3 that Petrobras has interests in off the coast of Brazil. The loan is cofinanced with Sumitomo Mitsui Banking Corporation (lead arranger), Mizuho Bank, Ltd., ING Bank N.V., Overseas-Chinese Banking Corporation Limited, Clifford Capital Pte. Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd., DVB Bank SE, Natixis, Sociètè Gènèrale, Mitsubishi UFJ Trust and Banking Corporation, Sumitomo Mitsui Trust Bank, Limited and Crèdit Industriel et Commercial. The total cofinancing amount is about USD1,263 million.
     
  2. In this project, MODEC will build an FPSO unit with the capacity to produce up to 150 thousand barrels of crude oil and 176 million cubic feet of gas per day, and store about 1,600 thousand barrels of crude oil. TARMV29 will provide charter services (leasing and operation and maintenance services) to Petrobras for 20 years.
     
  3. As oil companies in a number of countries have been actively developing offshore oil fields in recent years, they foresee an increasing need for new FPSO systems, primarily in Latin America (namely Brazil) and the Western Africa region. Petrobras, that develops many offshore oil fields in Brazil, made clear its focus on development. This is the 9th FPSO system charter to Petrobras by MODEC, which considers Brazil the most promising market for FPSO business.
     
  4. The Basic Plan on Ocean Policy*4 stipulates, concerning the substantial amount of methane hydrate deposits expected to exist in waters around Japan, that Japan should advance technology development considering the international situation, to start development projects led by the private sector on a commercial basis in the mid-2020s. In this project, Japanese underwater energy resource development companies provide an FPSO charter service which is an indispensable component for offshore resource development. Therefore, this loan will lead to the strengthening the international competitiveness of Japanese companies in offshore resource development by helping them acquire and improve technologies, management practices, and knowhow regarding the operation of FPSO systems, thereby this financing is expected to contribute to the securing of access to resources and their stable supply of natural resources to Japan.
     
  5. In light of the Basic Act on Ocean Policy and the Basic Plan on Ocean Policy, as Japan's policy-based financial institution, JBIC will continue to support the development and acquisition of resources strategically important to Japan, as well as the maintenance and strengthening of the international competitiveness of Japanese marine industries, by providing financial support to Japanese companies' business deployment overseas, including Africa and Brazil, where marine resources development is expected to continue to be active.
Note
  1. *1 Project finance is a financing scheme in which repayments are made solely from cash flows generated by the project and secured only on the project assets.
  2. *2 A floating production, storage, and offloading (FPSO) system is a floating vessel for the first stage processing of crude oil produced at the oil well, which separates associated gas and water, and for the storage and offloading of oil.
  3. *3 The oil fields, which are located about 125 kilometers off the southeast coast of the city of Macaé, the state of Rio de Janeiro, lie below an underwater pre-salt layer in the Compos Basin.
  4. *4 The Basic Plan on Ocean Policy was established based on the Basic Act on Ocean Policy, which came into force in July 2007, and adopted at a cabinet meeting in April 2013.
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