Institutional investor EIG has entered into definitive agreements to acquire for $390 million Brazil-based oil and gas services company and the only national FPSO operator Ocyan from Novonor.

“Brazil is home to over 25% of the global FPSO fleets, and we believe the future market dynamics for oil and gas infrastructure in Brazil are very favourable, underscoring our dual commitment to supporting growth and development in this important region while creating value for our investors,” said EIG’s chairman Blair Thomas.

“[Ocyan’s] resilience and the strength of its business have helped it overcome significant economic headwinds while maintaining a healthy balance sheet, positioning it for long-term growth.”

EIG’s total acquisition cost comprises $283 million for Novonor’s 100% equity interest plus $107 million for the for liquidation of its outstanding balance of non-voting securities related to Ocyan.

Ocyan has a more than 20-year track record of providing maintenance solutions to the offshore oil and gas industry, including the operation of subsea construction and decommissioning projects. As the only Brazilian operator in the floating production, storage and offloading (FPSO) sector, it currently operates four offshore units through a 50:50 joint venture with Altera Infrastructure.

Meanwhile, Ocyan, which has more than 3000 employees, recently established a New Energies division that is focused on the digitalisation of the oil and gas industry, and engineering, procurement, and construction contracts for renewable energy projects.

“Ocyan has built and operated more than $4 billion of drilling rigs, pipelaying support vessels and FPSOs, alone or in joint ventures, always enjoying the very strong support of its shareholders and Novonor. This acquisition does not impact current contracts and operations with our clients and suppliers,” said Ocyan’s chief executive Roberto Prisco Paraiso Ramos.

“This is another important chapter in our history and one that will undoubtedly create new opportunities for Ocyan.”

EIG, which has invested more than $2 billion in Brazil since 1998, said the acquisition reflects its long-term, comprehensive Brazilian strategy focused on infrastructure supporting high quality deep-water crude oil production, responsible decommissioning activities and investments in renewables and low carbon projects.

Following completion of the transaction, Ocyan will benefit from EIG’s technical expertise in FPSOs and potential synergies with Prumo Logistica — an EIG portfolio company — and its subsidiary, Port of Acu.

Flavio Valle, EIG’s head of Brazil, commented: “FPSO is an attractive asset class for both equity and debt opportunities, and we are pleased to deepen our presence in the industry. We have admired Ocyan for many years and have been impressed by their ability to develop ambitious projects through challenging economic environments.”

Novonor’s divestment is in line with the company’s strategy to re-establish its focus on diversified operations in the engineering sector, where it was established almost 80 years ago.

Completion of the transaction, which is subject to certain customary closing conditions, is expected in the first quarter of 2024.