Tullow Oil signs $205 million deal to acquire FPSO John Evans Atta Mills

Tullow Oil has signed a $205 million deal to acquire the floating production, storage and offloading vessel FPSO Professor John Evans Atta Mills, ending a 10-year lease arrangement with Japanese operator MODEC and giving the company direct ownership of the vessel that produces oil from Ghana’s deepwater TEN fields.

Key points

• Tullow Ghana Limited signed a Sale and Purchase Agreement to acquire the FPSO John Evans Atta Mills for a total of $205 million
• Tullow’s share of the purchase price is approximately $125.6 million, roughly equivalent to one year of its current net lease payments
• The acquisition will be financed through cash flow generated directly from the TEN fields within the year
• The deal eliminates recurring annual lease costs, resetting fixed operating expenses at the TEN fields and freeing up long-term cash flow
• The FPSO operates on the TEN fields in the Deep Water Tano Block offshore Ghana and has been in production since first oil in August 2016
• Transaction is expected to complete by end of Q1 2027, pending regulatory approvals
• Joint venture partners include Ghana National Petroleum Corporation (GNPC), GNPC Explorco, Kosmos Energy, and PetroSA
• Post-acquisition, Tullow plans to align TEN operations more closely with its adjacent Jubilee Field to maximise efficiencies and synergies

Context

The FPSO Professor John Evans Atta Mills, built and managed by MODEC, has operated on Ghana’s TEN fields since 2016. It is the second MODEC-operated vessel in Tullow’s Ghana portfolio, alongside the FPSO Kwame Nkrumah, which has produced oil from the Jubilee Field since 2010. The acquisition follows a broader strategy by Tullow to streamline operations and reduce fixed costs as it works to strengthen its balance sheet. CEO Ian Perks said the deal would deliver material savings by removing the annual lease cost and extend the economic life of the TEN fields beyond 2027.

Why it matters

For Ghana’s oil sector, FPSO ownership transitions like this signal maturing deepwater operations and tighter integration between the country’s offshore fields. With GNPC and GNPC Explorco among the joint venture partners, the deal also increases Ghanaian state participation in the long-term economics of the TEN fields. For Tullow, cutting the annual lease cost converts a recurring liability into an owned asset, improving free cash flow potential at a time when the company is focused on financial recovery and long-term value creation.

Source: Ghanamma