EIG has struck a deal to buy a Brazilian oilfield services company for $390 million, as part of a major move into FPSO operations.
The investor agreed the deal to buy Ocyan with Novonor and Brazilian develoment bank BNDES. EIG explained that $283mn would go to Novonor for its 100% equity stake, while the remaining cash would go to liquidating debt.
The deal is subject to various conditions. The companies said they expected to complete the sale in the first quarter of 2024.
“I have known and respected Ocyan for decades,” said R Blair Thomas, EIG chairman and CEO.
He said the company’s resilience had “helped it overcome significant economic headwinds while maintaining a healthy balance sheet, positioning Ocyan for long-term growth. Brazil is home to over 25% of the global FPSO fleets, and we believe the future market dynamics for oil and gas infrastructure in Brazil are very favourable, underscoring our dual commitment to supporting growth and development in this important region while creating value for our investors.”
Seeking synergies
Ocyan has been working in the offshore for 23 years. It is the only Brazilian operator in the FPSO industry. The company works on four offshore units with Altera Infrastructre via a 50:50 joint venture. It has long-term contracts for Libra, Karoon Energy and 3R Petroleum.
The Brazilian services company has also recently launched a new energies division. This focuses on digitalisation for the oil and gas industry, and engineering, procurement and construction (EPC) contracts for renewable energy.
EIG chair Thomas said the company was “excited” to support Ocyan’s move into renewable energy.
EIG has invested $2 billion in Brazil since 1998. The company said Ocyan would benefit from its FPSO expertise and “potential synergies” with Prumo Logística. EIG invested in Prumo Logística in 2013, which has the Porto do Açu as a subsidiary.
Porto do Açu is close to the offshore Campos and Santos basins and home of the FSRU BW Magna.
Ocyan CEO Roberto Prisco Paraiso Ramos said the deal would not have an impact on “current contracts and operations with our clients and suppliers. This is anotherB important chapter in our history and one that will undoubtedly create new opportunities for Ocyan.”
Asset class
Flavio Valle, EIG’s managing director and head of Brazil, noted the appeal of FPSOs as an “attractive asset class for both equity and debt opportunities, and we are pleased to deepen our presence in the industry”.
EIG has “admired Ocyan for many years and have been impressed by their ability to develop ambitious projects through challenging economic environments”, he said.
“With our global footprint and local capabilities, which are now enhanced by meaningful capital commitments from local clients, we believe that EIG is uniquely positioned to deliver on this complex transaction and to usher Ocyan into a new phase of growth.”
Novonor CEO Héctor Nuñez described the agreement as an “important milestone” for the group. Novonor is refocusing on “diversified operations in the engineering sector, where it was established almost 80 years ago”.
The seller was previously Odebrecht. The company has been working to sell off non-core assets. In November, it began talks on selling its stake in chemicals producer Braskem to Adnoc.
Ocyan won a contract from Petrobras in October to carry out work in the Campos Basin. It will carry out the work via a joint venture with Mota-Engil. It will begin offshore installation under the contract in 2025.
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