Bumi Armada inches up on US$200mil Caspian project

KUALA LUMPUR: Shares of Bumi Armada Bhd rose in late morning trade on Tuesday after it secured a US$200mil contract from Russia's OAO Lukoil for a pipeline project in the Caspian Sea.

At 11.09am, it was up three sen to RM4.48 with 1.25 million shares done.

Maybank Investment Bank Research said maintained a buy call on Bumi Armada with a sum-of-parts target price of RM4.88.

To recap, Bumi Armada Bhd's indirect unit Bumi Armada Caspian LLC secured the contract from Russia's OAO Lukoil for a pipeline project in the Caspian Sea.

The contract involved the engineering, procurement, installation and pre-commissioning of subsea in-field and inter-field pipelines for the Filanovsky field in the Russian sector of the Caspian Sea.

The completion period of the contract was estimated at 32 months and to be substantially completed by end 2014.

Maybank Research said Bumi Armada's US$200mil contract win from Lukoil was its second project in the Caspian Sea and should contribute positively to 2013-2015 earnings estimated at 3% per annum.

“We maintain our earnings estimates for now. We foresee further opportunities in this region should it execute this job to Lukoil's requirements, for Lukoil alone targets to spend US$18 billion in 2012-2021,” said the research house.