KUALA LUMPUR: Yinson Holdings Bhd has accepted a letter of intent (LoI) from Enauta Energia S.A. (Enauta) for the provision, operation, and maintenance of floating production storage and offloading (FPSO) asset in the Atlanta Field, located in the Santos Basin, offshore Brazil.
The LoI includes a call option for Yinson to acquire the contact's asset-owning business in exchange for a 15-year time-charter agreement.
It also includes a 15-year operation and maintenance agreement, with Enauta having the option to extend the terms of these agreements by an additional five years.
The estimated aggregate value of the contract is US$505 million, including a two-year operations and maintenance agreement, with a further increase to US$1.98 billion, inclusive of five years extension period, should Yinson exercise the call option.
Yinson group chief executive officer Lim Chern Yuan expressed confidence in the working relationship between the company and Enauta, which has been the foundation of the fruitful memorandum of understanding (MoU) and LoI negotiations.
"This will continue to see us through the execution of the project and its subsequent operations.
"We believe that this will ultimately allow both parties to reach our shared goal of advancing Brazil's energy industry through solutions that are as sustainable as possible," he said in a statement today.
The LoI was issued to Yinson Acacia Ltd, an indirect wholly-owned subsidiary of Yinson.
The LoI follows the signing of a binding MoU between Yinson and Enauta on 27 August 2021 to engage in exclusive negotiations for the potential supply and charter of the FPSO.
Yinson Offshore Production chief executive officer Flemming Grønnegaard said emission-lowering technologies had been included in the FPSO's design.
"We believe that Yinson and Enauta's joint commitment to pioneering low-emission designs will pave the way for the FPSO industry to contribute towards mitigating the world's climate change issues.
"Having successfully strengthened our resources, capacity and expertise in Brazil over the past few years, we are excited to swing into high gear in order to execute this project well and deliver on our commitments," he said.
The FPSO will be Yinson's third project award in Brazil, with the earlier two awarded assets on track for completion in 2023 and 2024, respectively.
Established in 1998, Enauta is one of the leading independent companies in Brazil's exploration and production sector.
The company has a strong presence in Brazil with two producing offshore assets, Atlanta and Manati field, as well as 19 exploration blocks.
Enauta is a wholly-owned subsidiary of Enauta Participacoes S.A., a listed entity on the Brazilian stock exchange B3 since 2011 with a market capitalisation of RM2.9 billion, total equity of RM2.6 billion and a net cash position of RM1.7 billion as at third quarter (Q3) of 2021.