Bumi Armada gets LOI for RM9.5b deal

PETALING JAYA: Bumi Armada Bhd has received a letter of intent (LOI) from Eni Angola SpA for a floating production, storage and offloading vessel (FPSO). The contract has an indicative value of US$2.9 billion (RM9.5 billion) and involves the vessel being delivered in 31 months and deployed offshore Angola.
The contract was awarded to a consortium of Bumi Armada Offshore Holdings Ltd (a wholly-owned subsidiary of Bumi Armada) and Angoil Bumi JV Limitade (ABJL). ABJL is an Angolan joint venture company of Bumi Armada Offshore Holdings, Angoil Exploracao Petrolifera SA and Cosmarg Limitada.
Eni Angola is a wholly owned subsidiary of Italian multinational oil and gas company Eni SpA.
In a statement yesterday, Bumi Armada said the LOI authorises the company to start engineering and procurement work on the FPSO immediately with a contract effective date March 28, 2014 while first oil is scheduled for end of October 2016.
"This LOI is our second large (capital expenditure of more than US$1 billion) FPSO award in six months and underscores our successful migration into the large-project FPSO sector," said Bumi Armada's CEO and executive director Hassan Basma.
The latest contract will take Bumi Armada's FPSO fleet to eight, moving the company into the top-tier of global FPSO players.
In a separate statement to the exchange, Bumi Armada said its wholly-owned subsidiary Armada Kraken Pte Ltd has secured a syndicated bridge loan facility of US$750 million from Overseas-Chinese Banking Corp Ltd, Maybank International Labuan Branch, Sumitomo Mitsui Banking Corp (Singapore branch), United Overseas Bank Ltd, Export-Import Bank of Malaysia Bhd and Korea Development Bank (Singapore branch).
The loan will be used for Armada Kraken to part-finance and reimburse all costs and expenses in relation to the FPSO and bareboat charter it clinched last year.
Guaranteed by Bumi Armada, the facility is intended to be refinanced by long-term project financing in due course.
On December 20, 2013, Armada Kraken entered into a bareboat charter contract for an FPSO to be deployed at the Kraken field located in the UK sector of the North Sea for eight years plus an option for a further 17 years.