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Ophir dropped Fortuna FLNG project
Ophir has received notification from the Equatorial Guinea that its Block R development licence, “which contains the Fortuna gas discovery, will not be extended following expiry of the licence on 31 December 2018.”
Ophir announced that it has received notification from the Equatorial Guinea’s ministry of mines and hydrocarbons that the UK-based company’s Block R development licence, “which contains the Fortuna gas discovery, will not be extended following expiry of the licence on 31 December 2018.”
“As a consequence, there will be an additional non-cash impairment of the asset, expected to be around $300 million, in Ophir’s full year financial results following the impairment taken in the half year results reported in September 2018.”
Earlier, Equatorial Guinea’s energy minister had warned that Ophir would be forced out of the Fortuna FLNG project unless the project’s $1.2 billion finance deal was presented to the government by December.
Ophir had planned to supply the 2.2 MMT/Y Fortuna FLNG project’s feedgas from Block R while Golar had intended to own and operate the FLNG facilities and will hire it out to Ophir for the project's 25-year life span.
Last month, Ophir and Indonesia-based Medco entered into discussions about a possible cash offer to be made by Medco for the entire issued and to be issued share capital of Ophir.
“Our discussions with Medco have taken place in the shared knowledge that there were a number of potential outcomes with respect to our Fortuna asset, and these discussions continue,” Ophir has reminded.
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On 13 Sep. 2018, Ophir Energy revealed that it has written down the value of its Fortuna FLNG project by $310 million. “Given the uncertainty around the value we can ultimately realise from Fortuna, we have impaired the asset to a carrying value of $300 million held on our balance sheet at the period-end.”
On 31 May 2018, Golar LNG said that its OneLNG partner Schlumberger decided to end involvement in Fortuna FLNG project, resulting in the dissolution of the joint venture.
The decision was influenced by the inability of the Fortuna FLNG project leader Ophir and OneLNG to finalize a debt financing package, as well as other capital and resource priorities, Golar LNG has admitted in its first quarter of 2018 result report, adding that the project’s financing increasingly unlikely in the short-term.
Meanwhile, Ophir Energy has said that Golar and Ophir remain actively engaged in senior level discussions with a number of counterparties over a financing solution for the project and it has already held informal discussions with other, well-capitalized, potential partners for the Fortuna project.
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Source(s) GLNGI Staff, Ophir Energy