Bumi Armada's Nigeria-based FPSO vessel ordered to halt operations, crude oil seized

PETALING JAYA: Bumi Armada Bhd’s wholly owned subsidiary Bumi Armada (Singapore) Pte Ltd has received a notice for the immediate shutdown of operations of its Nigeria-based floating production storage and offloading (FPSO) vessel, Armada Perdana, and a notice of seizure of crude oil produced and to be produced there.
The group said in a stock exchange filing today that it received a notice from Erin Petroleum Nigeria Ltd on April 11 advising it of a purported “force majeure event” and requesting the immediate and orderly shutdown of operations on Armada Perdana.
In addition, it also received a notice of seizure/attachment of goods from a third party informing it that the entire crude oil produced, to be produced and stored in the vessel has been seized.
This came with a writ of attachment in relation to legal proceedings to which the Bumi Armada group is not a party from the Federal High Court, Lagos.
Bumi Armada said it is of the view that the purported force majeure declaration by Erin Petroleum is wrongful under the operational and maintenance services contract and it is reviewing its legal options, including commencement of legal proceedings against Erin Petroleum, to uphold the contractual rights of Armada Oyo Ltd (AOL) and Bumi Armada Singapore under the contracts.

Bumi Armada maintains that the suspension of provision of services under the bareboat charterparty contract and the operational and maintenance services contract respectively remains in place and EPNL is not relieved from its obligation to make full payment of all payments due to AOL and Bumi Armada Singapore under the contracts.
The estimated financial impact of credit risk recovery for Bumi Armada group on results for the financial year ending Dec 31, 2018, is RM30 million.
On Bursa Malaysia today, Bumi Armada fell 1.6% to 90.5 sen on volume of 16.46 million shares.