FPSO Prof John Evans Atta Mills set for Tullow Oil takeover to cut costs, boost efficiency
A Sale and Purchase Agreement has been signed by UK-based oil and gas company Tullow Oil to acquire the floating production, storage and offloading vessel (FPSO), Professor John Evans Atta Mills, for a total consideration of $205 million.
The move is aimed at cutting fixed costs and enhancing long-term returns from its operations in Ghana.
The agreement was signed by Tullow’s wholly owned subsidiary, Tullow Ghana Limited, on behalf of itself and its joint venture partners.
The transaction is expected to be completed by the end of the first quarter of 2027, pending regulatory approvals and the fulfilment of other standard conditions.
Ghana’s TEN oil partners agree to acquire FPSO vessel after lease ends in 2027
The FPSO, which operates on the TEN fields located in the Deep Water Tano Block offshore Ghana, is currently owned and managed by MODEC under a 10-year lease arrangement.
After the acquisition is finalised, Tullow plans to align its operations more closely with activities at the adjacent Jubilee Field to maximise efficiencies and generate operational synergies.
Tullow’s portion of the purchase price stands at approximately $125.6 million. The company indicated that this amount is roughly equivalent to one year of its current net lease payments and will be financed through cash flow generated from the TEN fields within the year.
The joint venture partners in Tullow Ghana Limited include the Ghana National Petroleum Corporation (GNPC), GNPC Explorco, Kosmos Energy, and PetroSA.
Announcing the deal, Tullow said the acquisition aligns with its broader strategy to streamline production and lower fixed operating expenses by eliminating recurring lease costs associated with the vessel.
Chief Executive Officer Ian Perks described the agreement as a significant step in strengthening the company’s financial position over the long term.
“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,” he said.
The FPSO Prof John Evans Atta Mills, constructed by MODEC, achieved first oil in August 2016. It is the second MODEC-operated vessel supporting Tullow’s Ghana operations, following the FPSO Kwame Nkrumah, which commenced production on the Jubilee Field in 2010.
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