Bumi Armada secures contracts worth RM2b in India

by BERNAMA / pic by MUHD AMIN NAHARUL

BUMI Armada Bhd has secured two contracts related to Armada Sterling Floating Production, Storage and Offloading vessel (Armada Sterling FPSO) worth RM2.06 billion from India’s state-owned Oil and Natural Gas Corporation Ltd (ONGC).

One of the two contracts is secured via joint-venture company Armada D1 Pte Ltd (Singapore), which is a  fixed 10 years bareboat charter lease (BBC) for Armada FPSO worth US$370 million (RM1.54 billion).

And the other is also a fixed 10-year operation and maintenance contract bagged through its joint-venture company, Shapoorji Pallonji Armada Oil & Gas Services Pte Ltd (India) (SPAOGSPL) with an estimated value of INR9.2 billion (about RM520 million), it said in a filing with Bursa Malaysia here, today.

It said ONGC will operate the Armada Sterling FPSO in the ONGC D1 field located 200km off the west coast of Mumbai, India.

Both contracts, effective Sept 25, 2020, are expected to contribute positively to the future earnings of Bumi Armada Group during its tenure.

Armada D1 is 51:49 owned by Shapoorji Pallonji Oil & Gas Pte Ltd (SPOGPL) and Bumi Armada. ONGC is India’s state-owned oil company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd (NSE).

SPAOGSPL is 60:40 owned by (SPOGPL) and Bumi Armada (Singapore) Pte Ltd, a wholly-owned subsidiary of Bumi Armada.

The risks associated with the BBC Contract are normal operational risks on the vessel’s efficiency and reliability in terms of vessel performance, people capability, as well as Health Safety Security Environment and Quality performance.

These risks can be mitigated through Bumi Armada’s system of project management and internal business controls, as well as past experience with the same joint-venture partner for several FPSOs in India, it added.