UK Export Finance Finalizes $7.5 Million Deal for Oil and Gas Decommissioning

In a groundbreaking development, UK Export Finance (UKEF) unveiled a pioneering deal to bolster overseas oil and gas decommissioning efforts, forging a strategic partnership with Brazilian firm Ocyan. This landmark transaction, valued at $7.5 million, is set to benefit over 70 Scottish enterprises, marking a significant milestone in international collaboration.

The agency's announcement of a novel loan guarantee arrangement signals a pivotal step forward. It enables Ocyan to leverage financing from ABC International Bank to procure essential equipment from Aberdeen-based Maritime Developments Ltd (MDL). This equipment will be crucial in removing subsea cables and pipelines from offshore oil and gas installations in Brazilian waters.

Ocyan's procurement of MDL's equipment in 2022 laid the foundation for executing decommissioning contracts in Brazil. Utilizing MDL's state-of-the-art technology, Ocyan has already successfully dismantled hundreds of kilometers of subsea infrastructure.

The newly established $7.5 million loan guarantee empowers Ocyan to finance the Maritime Developments contract on a reimbursement basis, streamlining the decommissioning process.

Of particular significance is that Ocyan's utilization of the wheeled horizontal lay system, entirely conceived, crafted, and commissioned in Scotland, underscores the pivotal role of local expertise and resources. With solid support from a predominantly local supply chain, the contract is poised to inject vitality into more than 70 Scottish businesses, fostering economic growth and innovation.

Martin Whalley, director of trade and investment for Brazil at the Department for Business and Trade, lauded UKEF's inaugural foray into supporting overseas oil and gas decommissioning. He emphasized that this milestone transaction solidifies UKEF's position as a trusted ally in Brazil's transition toward cleaner energy solutions.

"This deal also highlights our dedication to aiding companies in transitioning away from oil and gas," he added. "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's managing director, said its engineering studies had identified limitations with existing technology on the market regarding 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," he explained. "Maritime Developments is known worldwide for our forward-thinking technology that enables challenging scopes to progress on time and budget, and this delivery to a Brazilian indigenous company is proof of that.

"In a true Maritime Developments 'we build innovation' style, we put our heads together, brainstormed alternative approaches - and delivered the wheeled horizontal lay system. 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."