Yinson bags RM2b FPSO project in Brazil


YINSON Holdings Bhd has received a contract from Enauta for the provision, operation and maintenance of a floating, production, storage and offloading (FPSO) in the Atlanta Field located in the Santos Basin, offshore Brazil, a contract worth US$505 million (RM2.14 billion). 

The upstream support services company stated its indirect wholly-owned subsidiary Yinson Acacia Ltd was awarded a letter of intent (LoI) by Enauta for the FPSO contract. 

The LoI comes with a call option for Yinson to acquire the asset-own- ing company of the project with a 15-year time-charter agreement and comes with an operation and maintenance agreement of the same duration, with Enauta having the right to extend the terms of these agreements by a further five years. 

“The estimated aggregate value of the project is US$505 million, including a two-year operation and maintenance agreement, with a further increase to US$1.98 billion, inclusive of a five-year extension period, should Yinson exercise the call option,” Yinson stated in a release yesterday. 

The LoI follows the signing of a binding memorandum of understanding between Yinson and Enauta on Aug 27 this year to engage in exclusive negotiations for the potential supply and charter of the FPSO. 

The FPSO marks Yinson’s third project award in Brazil, with the earlier two awards on track for completion in 2023 and 2024 respectively. 

Yinson group CEO Lim Chern Yuan said the group is confident the working relationship between the company and Enauta will continue to see them through the execution of the project and its subsequent operations. 

“We believe this will ultimately allow both parties to reach our shared goal of advancing Brazil’s energy industry through solutions that are as sustainable as possible,” Lim said in a statement. 

Yinson offshore production CEO Flemming Grønnegaard said the emission-lowering technologies had been included into the FPSO’s design. 

“We believe that Yinson and Enauta’s joint commitment to pioneering low-emission designs will pave the way for the FPSO industry to contribute towards mitigating the world’s climate change issues. 

“Having successfully strengthened our resources, capacity and expertise in Brazil over the past few years, we are excited to swing into high gear to execute this project well and deliver on our commitments,” he said. 

Enauta is an independent energy company in the exploration and production sector in Brazil, with two producing offshore assets, the Atlanta and Manati fields, as well as 19 exploration blocks. 

Yinson also proposed a bonus issue of up to 1.11 billion new ordinary shares on the basis of one bonus share for every one existing Yinson share held on an entitlement date to be determined. 

The company also proposed renounceable rights issue together with free detachable warrants on an entitlement date to be determined to raise RM1.22 billion in gross proceeds. 

Some RM540 million-RM582 million of the proceeds will be utilised to repay bank borrowings, while some RM441.5 million-RM513.2 million be used to fund the cost of building a new FPSO. 

The company has also targeted to spend at least RM44 million of the money on renewable energy projects.