(Ecofin Agency) - Panoro Energy ASA in its update on the Dussafu Marin production sharing contract in Gabon, announced that its subsidiary Pan Petroleum Gabon B.V. has signed a Memorandum of Understanding with BW Energy Gabon Pte. Ltd. (BWEG), the leading global provider of floating production services to the oil and gas industry.

Under the terms of the initial partnership agreement, Panoro will farm-out a 25% working interest in the Dussafu PSC to BWEG for a total cash consideration of $12 million. Panoro will also get a capped limited recourse development loan from BWEG to finance expenses through to first oil production.

This is coming after reports that BWEG has entered into a sale and purchase agreement with a subsidiary of Harvest Natural Resources to procure the entire share capital of Harvest Dussafu B.V., which holds a 66.66% operating working interest in the Dussafu PSC, for total cash consideration of $32 million. According to Panoro, the deal is subject to a number of conditions, including the signature of a complete purchase agreement with BWEG, the approval from the Gabonese Government and the conclusion of the separate sale of Harvest Dussafu B.V. to BWEG. The transactions are expected to be closed in Q1 of 2017, Your Oil and Gas news reports.

Upon completion of the deal, Panoro will retain an 8.33% working interest in the Dussafu PSC. “We are very pleased to be joining Panoro in Dussafu, and we look forward to working with them and the Government of Gabon to develop Dussafu's full potential. We believe that our level of planned investment to bring Dussafu into production as soon as possible demonstrates our new commitment to an integrated upstream business, which we see as new source of growth for BW Offshore,” Carl Arnet (photo), CEO of BW Offshore, said.

Anita Fatunji