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Tuesday February 19, 2013

Bumi Armada unit wins RM2.3bil FSPO contract


PETALING JAYA: A Bumi Armada Bhd unit has secured a contract worth US$740mil (RM2.29bil) from India-based Oil and Natural Gas Corp Ltd (ONGC) for a floating production storage and offloading (FSPO) vessel.

The Malaysia-based offshore oil and gas services provider said yesterday that its jointly controlled entity, SP Armada Oil Exploration Pvt Ltd, had received a notification of award from ONGC for the charter hiring of one FSPO for the Cluster-7 field sited on the west coast of Mumbai, offshore India.

Bumi Armada owns 49.998% of SP Armada, while the balance 50.002% is held by Shapoorji Pallonji and Co Ltd of India.

“The contract is for a fixed period of nine years, with an extension option of an additional seven years on a yearly basis. The contract is valued at approximately US$740mil, with an additional US$340mil for the optional extension period,” Bumi Armada said in a statement.

The company also noted that the delivery of the FSPO would be within 21 months from the date of the award.

The FSPO comes with a minimum storage of 510,000 barrels of oil and would be equipped with oil production and stabilisation, water injection, gas compression/dehydration to meet gas lift/injection and sales requirements and internal weatherwaning turret.

Earlier, CIMB Equities Research had said in a report that it would be thrilled by the positive updates on the C7 contract, stressing that Bumi Armada’s earnings visibility was solid, backed by long-term contracts.

“Bumi Armada has always been seen as the frontrunner for the contract because it had won a previous D1 FPSO contract from ONGC. In addition, the company is bidding for seven other FPSO contracts: one each in Malaysia, Indonesia and Angola, and two each in Nigeria and the North Sea.

“Malaysia’s Belud could be rolled out next month, followed by the North Sea’s Kraken by mid-year,” CIMB Research wrote.

“At the moment, Bumi Armada has five FPSO contracts, namely, two in Nigeria and one each in Vietnam, India and Australia,” it said.

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