Bumi Armada wins RM1.46b Australian company contract

by **hlk** Sat 01 Oct 2011, 09:10

KUALA LUMPUR: Bumi Armada Bhd, Malaysia's largest owner and operator of Offshore Support Vessels (OSVs), has won a RM1.46 billion contract from Australia's Apache Energy Ltd.

The contract is to supply and operate a floating, production, storage and offloading (FPSO) vessel for the Australian firm.

The company expects to secure more of such contracts in the near future, says chief executive officer Hassan Basma.

Basma said his optimism is based on the buoyant exploration and production activities as well as increase in global demand for the FPSO.

"FPSO is now acceptable as a good solution in the oil and gas industry. We already got two (contracts) this year. There are more in the pipeline," he told reporters after the signing of a contract agreement with Apache yesterday.

Basma signed on behalf of Bumi Armada, while Apache was represented by its regional vice president and managing director for Australia Thomas M. Maher.

Apart from Australia,Basma said, two of Bumi Armada's FPSOs have been contracted to operate in Nigeria, and one each in Vietnam and India.

"We are also bidding for jobs in Malaysia. We have now been accepted as a bidder in Malaysia. Previously, all single sources were given to MISC Bhd. It's no longer the case now," he said.

As such, Bumi Armada is also involved in three projects in Malaysia, namely under the marginal oil fields and gas initiatives as announced by Petronas recently.

However, he said a large portion of Bumi Armada's earnings come from abroad (about 80 per cent of total earnings), while the local business contributes about 20 per cent of the company's earnings, adding that the company now operates in 11 countries in three continents, namely Asia, Africa and Latin America.

On the deal with Apache, Basma said the contract is for an initial four years, with an option for a further four-year annual extension period thereafter.

"It (FPSO) is to be located in block WA-49-L of the Balvanes field, north-west Australia. The contract is expected to contribute positively to the revenue and earnings of Bumi Armada for the financial year ending December 31 2011," he said, adding that the Apache contract will increase Bumi Armada's order backlog to more than RM7 billion.

Commenting on the Apache contract, Basma said the deal underscores the company's strong engineering capabilities and rising reputation for on time, on budget, to high quality delivery of major projects.

"It signals our entry into the exciting but demanding Australian market and ushers in yet another growth period for the company," he said.

He said work has already begun, with refurbishing an existing such vessel (former Armada Prima) for this project, with the objective of delivering the vessel for first oil in first quarter of 2014.

"The long schedule is to synchronise the arrival of the FPSO with subsea installation and cyclone season," he said.

He explained that the FPSO, named Armada Claire, has been designed with a disconnectable riser turret mooring system for cyclonic weather in 135m water depth.

"Bumi Armada owns this technology, which allows it to work in cyclone and hurricane-prone areas like Southeast Asia, Australia , India and Gulf of Mexico," he said.