BW Offshore and the BW Group entered into an agreement to acquire 66.67% of the Dussafu production sharing contract offshore Gabon, Offshore Engineer reported. Both have formed a joint venture known as BW Energy Holdings (BWEH) for the purpose of pursuing oil and gas interests.

This came as Panoro Energy ASA announced that its subsidiary Pan Petroleum Gabon B.V. has signed a memorandum of understanding with BW Energy Gabon Pte. Ltd. (BWEG), Ecofin Agency informed. 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 $12m. Panoro will also get a capped limited recourse development loan from BWEG to finance expenses through to first oil production.

BW Offshore’s CEO, Carl K. Arnet, said: “We see the investment in the Dussafu block as an attractive opportunity with the potential to create significant value for the shareholders of BW Offshore.”

The drop in oil price over the past years has reduced the costs of drilling and subsea equipment significantly, which in turn has lowered the break-even price required for a Dussafu development. Following Gabonese license requirements, first oil is planned for 2018, BW Offshore said.