AFRICA-focused oil and gas explorer Bowleven will pay services company Petrofac US$9 million after terminating a strategic alliance between the two, following a farm-out of a Cameroon permit to third parties.
Bowleven chief executive Kevin Hart said his company had worked closely with Petrofac over the last two years.
“We appreciate their co-operation in reaching a mutually acceptable termination agreement,” he said.
The termination of the agreement is subject to the completion of the farm-out of Bowleven’s Etinde permit, to Russia-focused Lukoil and private company NewAge.
The farm-out deal will see Bowleven reduce its interest in the Etinde permit from 75 per cent to 25%, receiving an aggregate payment of US$250 million for the stake.
Lukoil will take a 37.5% stake in the permit, while NewAge will take an additional 12.5% – increasing its total group holding in the permit to 37.5%.
NewAge subsidiary Camop will become operator of the Etinde permit at completion of the deal – a move Bowleven said would allow it to focus on its exploration skillset.
Mr Hart said the company believed that the time had come to bring a partner to the project.
“With the Exploitation Authorisation approved and nearing formal award, gas sales discussions well advanced, and significantly increased scope for expansion to additional gas offtake solutions, in particular CLNG, we believe now is the right time to bring in a new partner and transfer operatorship,” he said.
“Lukoil are a major international integrated oil and gas group with extensive operating and marketing expertise globally and a track record of delivering world class oil and gas developments.
“The expanded joint venture will work together to realise the considerable potential of this world class asset,” he said.
Bowleven will use its earnings from the deal to fund both its share of Etinde’s ongoing appraisal and development program and also to progress the potential of its African exploration portfolio in Cameroon, Kenya and Zambia, Mr Hart added.