Tullow Oil has signed a $205 million agreement to acquire the floating production, storage and offloading vessel (FPSO) Prof. John Evans Atta Mills, in a strategic move to reduce fixed operating costs and secure long-term value from its Ghana operations.
The transaction, executed by Tullow’s wholly-owned subsidiary Tullow Ghana Limited on behalf of itself and its joint venture partners, is expected to be completed by the end of the first quarter of 2027, subject to regulatory approvals.
The FPSO, which serves as the production facility for the TEN fields on the Deep Water Tano Block offshore Ghana, is currently owned and operated by Modec under a 10-year lease contract. Upon completion of the acquisition, Tullow plans to integrate operations more closely with the adjacent Jubilee Field to unlock operational synergies and drive cost efficiencies.
Tullow’s net share of the consideration stands at approximately $125.6 million, equivalent to about one year of current net lease costs. The company expects to fund this from in-year cash flow generated by the TEN fields.
Tullow’s partners in the joint venture include the Ghana National Petroleum Corporation (GNPC), GNPC Explorco, Kosmos Energy and PetroSA.
Announcing the agreement, Tullow described the transaction as consistent with its strategy to optimise production and reduce fixed operating costs by eliminating annual lease payments for the vessel.
Chief Executive Officer Ian Perks said the deal would strengthen the company’s long-term financial outlook.
“This value accretive transaction is another important milestone for Tullow, in line with our strategic priority to optimise production activities and deliver improved economics as we leverage our operational expertise,” Perks said.
“The acquisition of the FPSO will deliver material cost savings by removing the annual lease cost and resetting our fixed costs at the TEN fields. By extending the economic life and removing the annual lease cost we will create additional free cash flow potential for the company beyond 2027.”
The Prof. John Evans Atta Mills FPSO was built by Modec and achieved first oil in August 2016. It is the second Modec vessel supporting Tullow’s Ghana portfolio, following the FPSO Kwame Nkrumah, which began production on the Jubilee Field in 2010.
