Teekay Offshore Gets the Keys to Cidade de Itajai FPSO

Petrojarl Cidade de Itajai FPSO
Petrojarl Cidade de Itajai, FPSO, image (c) Teekay Corporation

Vancouver-based Teekay Corporation (NYSE:TK), has turned over the keys to the Cidade de Itajai FPSO in a $204 million deal struck today with their daughter company, Teekay Offshore Partners L.P. (NYSE:TOO).   Upon finalization of this deal on 1 June, TOO will own 50 percent interest and Brazil-based Odebrecht Oil & Gas S.A. will own the remaining 50 percent interest of the facility.

“We are pleased to be completing another strategic FPSO acquisition, our second to-date in 2013, which will bring the Partnership’s total FPSO fleet size to five units,” commented Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC.  “The Itajai FPSO will add to our growing FPSO franchise in Brazil, where we currently own and operate two other FPSO units, and further builds on our strong relationship with Petrobras. In addition, the stable fixed-rate cash flow contributed from the Itajai FPSO will be accretive to the Partnership’s distributable cash flow.”

The Itajai FPSO is under a nine-year charter contract with Petrobras (plus extensions) and has been operating on the Baúna and Piracaba (previously named Tiro and Sidon) fields in the Santos Basin offshore Brazil since February 2013.  TOO’s 50 percent interest in the Itajai FPSO unit is expected to generate $25 million in annual cash flow, and $14 million in distributable cash flow.

The acquisition will be financed with assumed debt and proceeds from the recently completed equity private placement, notes Teekay Offshore in a statement on their website.