HO CHI MINH CITY: Bumi Armada Bhd and a partner has won a US$700 million (RM2.38 bilion) contract to supply a support vessel that will be used to develop the Te Giac Trang oil field in Vietnam.
The alliance between Bumi Armada and Vietsovpetro will provide a floating production storage and offloading vessel (FPSO), essentially a big tanker that can process and store oil.
Bumi Armada is Malaysia's biggest owner of offshore support vessels and is owned by tycoon T. Ananda Krishnan.
"Bumi Armada will get a substantial amount of this contract," chief executive officer Hassan Basma told reporters yesterday following a signing ceremony here.
The seven-year deal was awarded by Hoang Long Joint Operating Co (HLJOC) and has a one year extension. It can be extended for up to 15 years.
HLJOC is 41 per cent owned by Petrovietnam Exploration and Production Corporation (PVEP). PVEP is the unit of Vietnam government's wholly-owned Petrovietnam.
Although Hassan Basma declined to reveal Bumi Armada's share of the deal, he said its FPSO projects will begin contributing significantly to revenue from next year onwards.
This is its third FPSO deal after two others in Nigeria, and the company plans to bid for four or five more FPSO contracts annually.
Hassan Basma pointed out that this is the only FPSO project to be awarded globally this year, compared with over 20 in the previous year.
The company will use a combination of debt and equity funding to finance the project cost of US$300 million (RM1.02 billion).
The FPSO has a production capacity of 45,000 barrels per day (bpd) and one million barrels of storage. The contract will also cover offshore installation, hook-up and commissioning of the FPSO.
Bumi Armada has purchased a Suezmax tanker to be converted into an FPSO. The vessel will work in challenging waters, a combination of limited water depth and typhoon.
The TGT Field, also known as White Rhinoceros, is located offshore Vietnam in the northern part of Block 16-1, in the Cuu Long Basin.
HLJOC general manager Dr Ngo Huu Hai said that the first oil is expected to be pumped in the second quarter of 2011.
Bumi Armada's first FPSO, Armada Perkasa, has been operating off the coast of Nigeria since March 2008, surpassing two million barrels of oil in July. Its second FPSO, Armada Perdana, which has processing capacity of 40,000bpd and storage capacity of one barrels of processed oil, is also in Nigeria.
Conversion work was completed 18 months from the time it was awarded the project. Its first oil is expected next week.
On the status of its possible relisting, Hassan Basma said it will continue to evaluate and monitor the situation. Bumi Armada was delisted in 2003.
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