Banking on the Bit
Visionary financing allows
early sanctioning
Two separate groundbreaking deals— signed just days apart—are as much a part of the Delta House story as the field itself. It’s likely that the agreement to fund the host platform
is the first of its kind in the oil industry. Much
of the credit for the Delta House development
goes to ArcLight Capital Partners, majority
owner of the host platform, and Blackstone,
partners in a LLOG joint venture, which is
the largest working interest owner of the
subsea wells.
Funding the FPS
The seven companies that own the leases do
not own 100% of the Delta House floating
production system (FPS). Instead, LLOG and
its partners—owners of the fields—pay a
processing fee to the owners of the FPS. While
that is unusual, the arrangement is not unique
within the industry. In the case of Delta House,
it was a critical step that allowed the whole
project to work. The commercial contract,
which involved a total of eight companies,
is quite complex. The final agreement runs
more than 8,700 pages, yet it was completed in
only six months.
“Delta House would have been difficult to
execute without ArcLight,” says Philip LeJeune,
LLOG’s chief financial officer. “Even though
ArcLight is a private investment firm that
focuses on North American energy assets, not
many investment teams would have gone the
extra mile to make this project work.”
Philip LeJeune
LLOG chief fnancial
offcer
“We could have put up the
capital to build it ourselves, but
that would have meant a large
investment in the midstream
side of the business.”
