Project Financing for FPSO Operation Project in Marlim Oil Field of Brazil
Supporting Offshore Resource Development Business and Strengthening International Competitiveness of Japanese Companies under the Growth Investment Facility

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

1. The Japan Bank for International Cooperation (JBIC; Governor: MAEDA Tadashi) signed on October 9, a loan agreement in project financing^*1 amounting to up to approximately USD352 million (JBIC portion) with Dutch company Marlim1 MV33 B.V. (MMV33), which is incorporated by MODEC, Inc. (MODEC), Mitsui & Co., Ltd., Mitsui O.S.K. Lines, Ltd., and Marubeni Corporation. This loan is provided under JBIC's Growth Investment Facility.^*2 The loan is co-financed with MUFG Bank, Ltd. (the facility agent), Sumitomo Mitsui Banking Corporation, Mizuho Bank, Ltd., Société Générale, Clifford Capital Pte. Ltd., Standard Chartered Bank and BNP Paribas. The total co-financing amount is approximately USD969 million. Nippon Export and Investment Insurance (NEXI) will provide the insurance for a part of the loan by the private financial institutions.
     
2. The purpose of this loan is to finance long-term FPSO^*3 vessel chartering services to Petróleo Brasileiro S.A. (Petrobras), a state-owned oil company in Brazil for developing the Marlim oil field^*4 located off the coast of Brazil and in which Petrobras solely holds interests. In this project, MODEC will build an FPSO unit with the capacity to produce up to 80 thousand barrels of crude oil per day and 248 million cubic feet of gas per day, and store 1.0 million barrels of crude oil. MMV33 will provide FPSO vessel chartering services, including leasing, operation and maintenance services, to Petrobras for 25 years.
     
3. As oil developing companies in a number of countries have been actively developing offshore oil fields in recent years, the demand for new FPSO systems is expected to increase particularly in South America (namely Brazil) and the West African region. Petrobras is engaged in developing many offshore oil fields in Brazil. MODEC views Brazil as the most important market for the FPSO business. This project is the 13th FPSO vessel chartering service provided by MODEC to Petrobras.
     
4. In this project, Japanese companies are providing FPSO charter services while improving their technologies regarding the operations and maintenance of FPSO systems as well as increasing their project management know-how. This project will thus contribute to increasing and maintaining the international competitiveness of the Japanese offshore resource development industry. The Japanese government's Basic Plan on Ocean Policy^*5 emphasizes technology advancements for the development and commercialization of marine resources in waters around Japan. In this context, the business operation by MODEC and others on this project is also expected to contribute to the secure, stable supply of natural resources to Japan in the long term.
     
5. As Japan's policy-based financial institution, JBIC will continue to support Japanese companies in expanding their business to foreign countries including Brazil and Africa, which are particularly active in marine resources development, in order to maintain and increase the international competitiveness of the Japanese marine industry as well as to acquire strategically important resources for Japan.
     

Note

1. *1 
   Project finance is a financing scheme in which repayments for a loan are made solely from the cash flows generated by the project.
2. *2 
   See Announcement on January 31, 2020 and May 1, 2020.
3. *3 
   A floating production, storage and offloading (FPSO) system is a floating vessel used in the first stage processing of crude oil produced at an oil well. It separates associated gas and water, and also stores and offloads oil.
4. *4 
   This oil field is located in the post-salt layer of the Campos Basin, which is approximately 150 kilometers off the east coast of the state of Rio de Janeiro.
5. *5 
   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 on May 15, 2018.