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Overview

Bank of China contributes $103.3 million to $1.55 billion syndicated loan for the FPSO Cidade de Saquarema Project

Commitments (Constant USD, 2023)$108,072,293
Commitment Year•2015Country of Activity•BrazilDirect Recipient Country of Incorporation•Multiple JurisdictionsSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jul 1, 2015
End (actual)
Feb 1, 2016
Last repayment (originally scheduled)
Jun 27, 2029

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

State-owned Commercial Banks

  • Bank of China (BOC)

Cofinancing agencies

Private Sector

  • ING Bank N.V.

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • Beta Lula Central Holding Ltd.
  • Beta Lula Central Operações Marítimas Ltda.
  • Beta Lula Central S.à.r.l.

Loan description

Bank of China contribution to USD 1.55 billion syndicated loan for the FPSO Cidade de Saquarema Project

Grant element•21.2545%Interest rate (t₀)•5.1%Interest type•Fixed Interest RateMaturity•14 years

Narrative

Full Description

Project narrative

In July 2015, Beta Lula Central S.à.r.l., Beta Lula Central Holding Ltd., Beta Lula Central Operações Marítimas Ltda. -- three special purpose vehicles and joint ventures of SBM Offshore (56%), Mitsubishi Corporation (20%), Nippon Yusen Kabushiki Kaisha (19%), and Queiroz Galvão Óleo e Gás S.A. (5%) -- signed a $1.55 billion syndicated loan (facility) agreement with a group of sixteen international banks for the FPSO Cidade de Saquarema Project. The facility was composed of three separate tranches with a 5.1% weighted average cost of debt and a 14-year post-completion maturity: (1) an Atradius Dutch State Business N.V. (Atradius)-covered tranche of $800 million, including $167 million covered by Servizi Assicurativi del Commercio Estero S.p.A. (SACE) and $53 million covered by UK Export Finance (UKEF); (2) a $400 million tranche covered by Nippon Export and Investment Insurance (NEXI); and (3) a $350 million uncovered commercial tranche. Bank of China reportedly contributed $103.3 million the loan syndicate, although the specific tranche or tranches to which it contributed is (are) unknown. The purpose of the project was to construct a floating production storage and offloading (FPSO) unit -- a floating vessel used by the offshore oil and gas industry for the production and processing of hydrocarbons -- in the Lula field within the pre-salt province offshore Brazil. The vessel was designed with a processing capacity of up to 150,000 barrels of crude oil and 6 million cubic meters of gas per day, and storage capacity of approximately 1.6 million barrels of crude oil. A joint venture was to own and operate the vessel on a 20-year charter service for Tupi B.V. Refurbishment and conversion work on Cidade de Saquarema progressed during the first half of 2015 at a Chinese yard and near completion. The FPSO Cidade de Saquarema started production on July 8, 2016.

Staff comments

1. The pre-salt oil reservoirs in Brazil are among the world’s largest recent discoveries. SBM Offshore, a leading global provider of floating production storage and offloading units, is an important contributor to the success of the Cidade de Saquarema FPSO project, as it will produce around 40 percent of the pre-salt production on behalf of Petrobras upon the completion of the project.