4.3.31Investment in Associates and Joint Ventures
The Company has several joint ventures and associates:
|
Entity name |
Partners |
Joint venture/ |
% of ownership |
Country registration |
2019 main reporting segment |
Project name |
|---|---|---|---|---|---|---|
|
Sonasing Xikomba Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Angola Offshore Services Limitada |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
FPSO N'Goma |
|
OPS-Serviços de Produção de Petróleos Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P. |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
Angola operations |
|
OPS-Serviços de Produção de Petróleos Ltd. Branch |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P. |
Joint venture |
50.00 |
Angola |
Lease & Operate |
Angola operations |
|
Sonasing Sanha Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Angola Offshore Services Limitada |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
FPSO Sanha |
|
Sonasing Kuito Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Angola Offshore Services Limitada |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
FPSO Kuito |
|
Sonasing Mondo Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Vernon Angolan Services Limitada |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
FPSO Mondo |
|
Sonasing Saxi Batuque Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Vernon Angolan Services Limitada |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
FPSO Saxi-Batuque |
|
OPS Production Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P. |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
Angola operations |
|
Anchor Storage Ltd. |
Maersk group |
Joint venture |
49.00 |
Bermuda |
Lease & Operate |
Nkossa II FSO |
|
Gas Management (Congo) Ltd. |
Maersk group |
Joint venture |
49.00 |
Bahamas |
Lease & Operate |
Nkossa II FSO |
|
Solgaz S.A. |
Deepwater Enterprises A/S (an entity of Maersk group) |
Joint venture |
49.00 |
France |
Lease & Operate |
Nkossa II FSO |
|
Malaysia Deepwater Floating Terminal (Kikeh) Ltd. |
Malaysia International Shipping Corporation Behard |
Joint venture |
49.00 |
Malaysia |
Lease & Operate |
FPSO Kikeh |
|
Malaysia Deepwater Production Contractors Sdn Bhd |
Malaysia International Shipping Corporation Behard |
Joint venture |
49.00 |
Malaysia |
Lease & Operate |
FPSO Kikeh |
|
SNV Offshore Ltd. |
Naval Ventures Corp (an entity of Synergy group) |
Joint venture |
50.00 |
Bermuda |
Turnkey |
Brazilian yard |
|
Estaleiro Brasa Ltda. |
SNV Offshore Limited (see information above) |
Joint venture |
50.00 |
Brazil |
Turnkey |
Brazilian yard |
|
Brasil Superlift Serviços de Içamento Ltda. |
SNV Offshore Limited (see information above) |
Joint venture |
50.00 |
Brazil |
Turnkey |
Brazilian yard |
|
Pelican Assets S.à.r.l. |
SNV Offshore Limited (see information above) |
Joint venture |
50.00 |
Luxembourg |
Turnkey |
Brazilian yard |
|
Normand Installer S.A. |
The Solstad group |
Joint venture |
49.90 |
Switzerland |
Turnkey |
Normand Installer |
|
SBM Ship Yard Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Daewoo Shipbuilding & Marine Engineering Co. Ltd. |
Associate |
33.33 |
Bermuda |
Turnkey |
Angolan yard |
|
PAENAL - Porto Amboim Estaleiros Navais Ltda. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; SBM Shipyard |
Associate |
30.00 |
Angola |
Turnkey |
Angolan yard |
|
OS Installer Limited |
Ocean Yield Malta Ltd |
Associate |
25.00 |
Malta |
Turnkey |
SBM Installer |
The Company has no joint operation as per definition provided by IFRS 11 ‘Joint arrangements’.
The movements in investments in associates and joint ventures are as follows:
|
2019 |
2018 |
||
|---|---|---|---|
|
Investments in associates and joint ventures at 1 January |
421 |
457 |
|
|
Share of profit of equity-accounted investees |
44 |
13 |
|
|
Dividends |
(137) |
(59) |
|
|
Cash flow hedges |
(1) |
2 |
|
|
Capital increase/(decrease) |
2 |
3 |
|
|
Foreign currency variations |
(3) |
1 |
|
|
Share in negative net equity reclassification to loans to joint ventures and associates |
(1) |
2 |
|
|
Other |
- |
3 |
|
|
Investments in associates and joint ventures at 31 December |
325 |
421 |
Purchase and termination options in finance lease contracts - Joint ventures and associates
The finance lease contracts of FPSO N'Goma, FPSO Saxi and FPSO Mondo, where the Company is the lessor, include call options for the client to purchase the underlying asset or to terminate the contract early. The finance lease contract of FPSO Kikeh also includes options for the client to purchase the underlying asset or to terminate the contract early, but it should be noted that the first option for the client to exercise the purchase option on FPSO Kikeh is early 2022.
The exercise of the purchase option on FPSOs N'Goma, Saxi and Mondo as per December 31, 2019 would have resulted in a gain for the Company or a near break-even result. The exercise of the option to terminate the contract early, in which case the Company retains ownership of the vessel, would result in a gain for FPSO Kikeh, break-even result for FPSOs Saxi and Mondo, while this would result in a loss for the Company on FPSO N'Goma. The Company considers the likelihood of the client exercising the option to terminate the contract on this specific contract as remote.
Hyperinflation Angola
Angola is no longer a hyperinflation country in 2019. In 2018 the Company applied hyperinflation accounting in line with the requirements of IAS 29 for its local branch in Angola (OPS-Serviçõs de Produção de Petróleos Ltd.).
The following tables present the figures at 100%.
Information on significant joint arrangements and associates - 2019
|
Project name |
Place of the business |
Total assets |
Non-current assets |
Cash |
Loans |
Non- current liabilities |
Current liabilites |
Dividends paid |
Revenue |
|---|---|---|---|---|---|---|---|---|---|
|
FPSO N'Goma |
Angola |
987 |
795 |
55 |
445 |
445 |
128 |
170 |
81 |
|
Angola operations |
Angola |
120 |
2 |
9 |
25 |
- |
105 |
- |
132 |
|
FPSO Kikeh |
Malaysia |
204 |
103 |
5 |
- |
5 |
17 |
91 |
82 |
|
Brazilian yard |
Brazil |
2 |
2 |
(0) |
0 |
- |
2 |
- |
0 |
|
Angolan yard |
Angola |
80 |
(0) |
45 |
485 |
485 |
32 |
- |
3 |
|
Non material joint ventures/associates |
216 |
198 |
11 |
242 |
166 |
82 |
15 |
5 |
|
|
Total at 100% |
1,610 |
1,099 |
126 |
1,197 |
1,101 |
367 |
275 |
304 |
Information on significant joint arrangements and associates - 2018
|
Project name |
Place of the business |
Total assets |
Non-current assets |
Cash |
Loans |
Non- current liabilities |
Current liabilites |
Dividends paid |
Revenue |
|---|---|---|---|---|---|---|---|---|---|
|
FPSO N'Goma |
Angola |
1,055 |
892 |
35 |
414 |
339 |
190 |
- |
89 |
|
Angola operations |
Angola |
210 |
3 |
9 |
40 |
0 |
194 |
- |
175 |
|
FPSO Kikeh |
Malaysia |
280 |
181 |
11 |
- |
5 |
21 |
104 |
87 |
|
Brazilian yard |
Brazil |
13 |
7 |
1 |
(0) |
- |
9 |
- |
12 |
|
Angolan yard |
Angola |
94 |
(0) |
49 |
460 |
460 |
36 |
- |
8 |
|
Non material joint ventures/associates |
231 |
200 |
15 |
245 |
193 |
64 |
20 |
38 |
|
|
Total at 100% |
1,883 |
1,282 |
119 |
1,159 |
997 |
514 |
124 |
408 |
The bank interest-bearing loans and other borrowings held by joint ventures and associates are as follows:
Information on loans and borrowings of joint ventures and associates
|
Net book value at 31 December 2019 |
Net book value at 31 December 2018 |
||||||||
|---|---|---|---|---|---|---|---|---|---|
|
Entity name |
% Ownership |
% Interest |
Maturity |
Non-current |
Current |
Total |
Non-current |
Current |
Total |
|
US$ Project Finance facilities drawn: |
|||||||||
|
Sonasing Xikomba Ltd |
50.00 |
5.10% |
15-05-2026 |
386 |
59 |
445 |
166 |
90 |
256 |
|
Normand Installer SA |
49.90 |
4.30% |
23-02-2023 |
32 |
3 |
35 |
- |
35 |
35 |
|
OS Installer Limited |
25.00 |
Libor + 2.35% |
17-09-2026 |
66 |
7 |
73 |
73 |
7 |
80 |
|
Loans from subsidiaries of |
314 |
25 |
339 |
408 |
93 |
501 |
|||
|
Loans from other shareholders of the joint ventures and associates |
297 |
- |
297 |
275 |
5 |
280 |
|||
|
Loans from other joint ventures 2 |
248 |
6 |
254 |
258 |
3 |
261 |
|||
|
Net book value of loans and borrowings |
1,343 |
100 |
1,443 |
1,181 |
234 |
1,415 |
|||
- 1 Please refer to note 4.3.16 'Loans to joint-ventures and associates' for presentation of the carrying amount of these loans in the Company's Consolidated Statement of financial position.
- 2 Mainly loans from the joint ventures SBM Shipyard Ltd to the JV PAENAL - Porto Amboim Estaleiros Navais Ltda.
On December 9, 2019, the Company closed a supplemental non-recourse project loan facility of US$250 million related to Sonasing Xikomba Ltd., the entity that owns the FPSO N'Goma. The total outstanding loan amount increased to c.US$450 million and the original maturity date of the loan was extended by c. 4.5 years to an expiration date of 15 May 2026.
Aggregated information on joint ventures and associates
|
2019 |
2018 |
||
|---|---|---|---|
|
Net result at 100% |
68 |
29 |
Reconciliation equity at 100 % with investment in associates and joint ventures
|
2019 |
2018 |
||
|---|---|---|---|
|
Equity at 100% |
142 |
372 |
|
|
Partner ownership |
15 |
(120) |
|
|
Share in negative net equity reclassification to loans to joint ventures and associates |
168 |
168 |
|
|
Investments in associates and joint ventures |
325 |
421 |