CDB provides $1.5 billion of receivables financing for the Almirante Tamandaré Floating Production Storage and Offloading (FPSO) Unit Project

On July 27, 2021, SBM Offshore announced that it had signed contracts with Petróleo Brasileiro S.A. (Petrobras) for the 26.25 years lease and operation of FPSO Almirante Tamandaré vessel. These contracts follow the signing of a binding letter of intent on February 25, 2021. The FPSO Almirante Tamandaré vessel will be deployed to the Búzios oilfield, in which China National Offshore Oil Corporation (CNOOC) and China National Oil & Gas Exploration and Development Corporation (CNODC) are participants. The Búzios oilfield is located in Santos Basin, southeast offshore of Brazil, with an average water depth of approximately 2,200 meters. It is the world's largest deep-water pre-salt producing oil field. n August 20, 2021, China Development Bank (CDB) signed a $1.5 billion receivables financing agreement with FPSO Almirante Tamandaré (Búzios 6) — a special purpose vehicle and wholly-owned subsidiary of SBM Offshore — for the Almirante Tamandaré Floating Production Storage and Offloading (FPSO) Unit Project. The borrowing terms of the loan are unknown. Then, on September 23, 2021, FPSO Almirante Tamandaré (Búzios 6) signed a $635 million bridge loan (facility) agreement for the financing of the construction of FPSO Almirante Tamandaré. The tenor of the bridge loan was twelve months with an extension option for another six months. Repayment was expected to take place upon closure and the first drawdown of the ‘project loan’. Then, on January 25, 2022, SBM Offshore announced that it had entered into a shareholder agreement with Mitsubishi Corporation (MC) and Nippon Yusen Kabushiki Kaisha (NYK). MC and NYK acquired 25% and 20% ownership stakes, respectively, in FPSO Almirante Tamandaré (Búzios 6), leaving SBM Offshore with a 55% ownership stake. Delivery of the FPSO Almirante Tamandaré was originally expected to take place in the second half of 2024. The FPSO is being built under SBM Offshore's Fast4Ward program. The Fast4Ward program includes a new build, multi-Purpose Floater hull combined with several standardized topsides modules. SBM Offshore’s fourth Fast4Ward MPF hull has been allocated to this project. Under the Fast4Ward program, SBM Offshore usually orders an FPSO hull without a firm contract in hand, so that, when a contract is secured, the FPSO delivery time is shorter. The hull that has been allocated for the FPSO Almirante Tamandaré was ordered in China in December 2019. Once delivered, the FPSO Almirante Tamandaré will have a water injection capacity of 250,000 barrels per day and a minimum storage capacity of 1.4 million barrels of crude oil. As of May 2022, SBM Offshore reported that topsides fabrication for FPSO Almirante Tamandaré and construction of the Fast4Ward Multi-Purpose Floater (MPF) hull were progressing in China and Brazil.

Additional details

1. In a typical receivables financing agreement (or deferred payment agreement), the company that the project owner in the host country has selected as its engineering, procurement, and construction (EPC) contractor is also a lender to the project owner. The company assigns receivables under its EPC contract with the project owner to one of or more banks. Upon assignment of receivables, the bank or banks will release funds to the company so it can discharge its obligations under the receivables financing agreement as a lender. Receivables financing is also known as accounts receivable financing (finance) or A/R financing (finance) or 应收账款融资 (in Chinese). These other terms are used because the accounts receivable of a company (i.e., unpaid invoices) are being used as collateral to unlock working capital—typically in the form of a bank loan (‘receivables loan’). Sellers often face cash flow problems when their buyers do not make full payment at the due date of the invoice. A receivables financing arrangement addresses this problem by allowing them to sell their outstanding invoices to a bank at a discounted rate. This approach allows the seller to receive the remaining invoice amount before the due date of the invoice. The bank either gets its money back at invoice maturity through the seller (acting as a collecting agent) or directly from the debtor. 2. China National Offshore Oil Corporation (CNOOC) and China National Oil & Gas Exploration and Development Corporation (CNODC) are both Chinese state-owned companies. 3. One source refers to a $1.9 billion financing agreement for the Almirante Tamandaré Floating Production Storage and Offloading (FPSO) Unit Project that is backed by SACE, NEXI, Atradius, and Sinosure. This issue warrants further investigation.

Number of official sources

6

Number of total sources

18