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Husky, CNOOC Madura Ltd delay again awarding FPSO lease to Bumi Armada

JAKARTA (Rambu Energy) – Bumi Armada Bhd, a Malaysian shipbuilder, said Wednesday (Nov. 12) that the Calgary-based Husky and its partner CNOOC Madura Ltd (HCML) has delayed again the award of contract for the floating, production, storage and offloading (FPSO) vessel to the company’s wholly-owned subsidiary Bumi Armada Offshore Holdings Ltd (HAOHL), together with its Indonesian joint venture company PT Armada Gema Nusantara (AGN).

Based on the letter of intent issued in mid August, the consortium will supply an FPSO Vessel to HCML at a total contract value of US$1.18 billion for a fixed period of ten (10) years with options of five (5) annual extensions worth an aggregate value of US$147 million.

“Bumi Armada wishes to announce that HCML and the Consortium have mutually agreed via an Amendment of Letter of Intent dated 6 November 2014, to extend further the period for the execution of the Contract,” Bumi Armada said in a statement.

Bumi Armada said the letter of intent for the FPSO supply will expire on Nov. 27, 2014, subject to such extension as may be mutually agreed bytween HCML and Bumi Armada or upon signing of the contract.

The extension is the third – the first one was announced on Oct. 14 and the second extension was announced on Oct. 31.

In August this year, Bumi Armada announced that its wholly-owned subsidiary Bumi Armada Offshore Holdings Limited (BAOHL), together with its joint venture company, PT Armada Gema Nusantara (PT AGN), have been appointed as the FPSO vessel lease contractor for the Madura BD field, approximately 65 kilometers east of Surabaya town and about 16 km south of Madura Island.

Currently, Husky owns 40 percent participating interest in the Madura Strait block and also acting as the operator, CNOOC owns 40 percent and a local company PT Samudera Energy 20 percent. Husky expects the first oil production to start in early 2017. (*)

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