The UK's export credit agency has completed its first transaction in support of overseas offshore oil and gas decommissioning.
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$7.5 million UKEF loan guarantee allows Brazilian firm Ocyan to secure cutting-edge equipment from Scottish company Maritime Developments Ltd.
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Ocyan is using the UK equipment to remove subsea cables and pipelines from offshore oil and gas rigs in Brazilian waters.
UK Export Finance (UKEF) has closed its first ever transaction supporting overseas oil and gas decommissioning, securing finance for a major contract which benefits over 70 Scottish firms.
The export credit agency has issued a $7.5 million guarantee which allows Brazilian contractor Ocyan to secure financing from ABC International Bank plc for new equipment from Scottish business Maritime Developments Ltd (MDL).
Based in Aberdeen, MDL is a specialist in subsea pipelaying which provides consultancy, equipment and personnel to the energy sector. It won the 2022 Queen's Award for Enterprise in the International Trade category.
Supported by early-stage discussions with UKEF, Ocyan ordered MDL equipment in 2022 so that it could deliver a decommissioning contract in Brazil. Ocyan has since used the Scottish company's Wheeled Horizontal Lay System technology to remove hundreds of kilometres of subsea cables and pipes from defunct FPSO oil and gas rigs in Brazilian waters.
The newly agreed $7.5 million guarantee means that Ocyan can now finance the MDL contract on a reimbursement basis, boosting its access to working capital.
The Wheeled Horizontal Lay System is entirely designed, manufactured and commissioned in Scotland by MDL, supported by its primarily local supply chain - meaning that the contract has supported over 70 Scottish businesses.
The partnership signals UK Export Finance's ability to provide continued support for decommissioning and renewable energy projects worldwide.
Martin Whalley, Director of Trade and Investment for Brazil, Department for Business and Trade, said:
In securing its first transaction to support overseas oil and gas decommissioning, UK Export Finance (UKEF) has demonstrated its role as a trusted partner in Brazil's journey towards sustainability. This deal also highlights our dedication to aiding companies in transitioning away from oil and gas. With £5 billion allocated to projects in Brazil, UKEF is at the forefront of supporting Brazilian enterprises in adopting more sustainable practices. This deal exemplifies the ongoing collaboration between the UK and Brazil in advancing clean energy transition across various industries, including offshore wind and hydrogen.
Andrew Blaquiere, MDL Managing Director, said:
MDL is known worldwide for our forward-thinking technology that enables challenging scopes to progress on time and on budget, and this delivery to a Brazilian indigenous company is proof of that.
Our engineering studies identified limitations with existing technology on the market when it came to recovery capability from deep waters like those in Brazil. The alternative for these operations would be to use a specialist construction vessel, resulting in high cost and scheduling challenges.
In a true MDL ‘We Build Innovation' style, we put our heads together, brainstormed alternative approaches - and delivered the Wheeled HLS.
As a result, the client - and the Brazilian market - gained a cost-effective way to kit-out a vessel of opportunity to handle high loads and tackle recovery projects - this way enabling more sustainable end-of-life operations.
Charlotte Wiltshire, European Head of Wholesale Banking, ABC International Bank plc said:
We are delighted to continue our support of UK businesses in conjunction with UKEF, leveraging off Bank ABC Group's MENA and international footprint. This is an important milestone transaction, promoting the UK's expertise in the oil and gas decommissioning and renewable energy arena. Bank ABC is looking forward to enabling similar energy transition projects in future.