Tullow buys Prof. Atta Mills FPSO for $205million
UK-based oil and gas firm Tullow Oil has signed a Sale and Purchase Agreement to acquire the floating production, storage and offloading vessel Prof. John Evans Atta Mills for a gross consideration of 205 million US dollars, in a move aimed at reducing fixed costs and strengthening long-term value from its Ghana operations.
The transaction was executed by Tullow’s wholly owned subsidiary, Tullow Ghana Limited, on behalf of itself and its joint venture partners. Completion is expected at the end of the first quarter of 2027, subject to regulatory approvals and other conditions precedent.
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. Once the acquisition is finalised, Tullow intends 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, approximately 125.6 million US dollars, is equivalent to about one year of current net lease costs and is expected to be funded from in-year cash flow generated by the TEN fields.
The company’s partners in the Tullow Ghana Limited joint venture are the Ghana National Petroleum Corporation, 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.
He said: “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. 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. This transaction is another key deliverable for Tullow, strengthening the foundations for future value creation.”
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.