Bumi Armada is understood to be partnering India’s Shapoorji Pallonji & Co Ltd. The two have equal shareholding in a joint venture company SP Armada Oil Exploration Pvt Ltd.
Industry players said Bumi Armada is the front runner to bag the job. The other shortlisted companies were not known at press time.
“Yes we know both the companies — Bumi Armada and us — are in, but we are not sure who else is,” an executive from M3Nergy told The Edge Financial Daily yesterday.
A source at Bumi Armada confirmed his company has put in a bid for the contract but declined to comment on whether it was shortlisted.
“We have the capability and the financial resources … I don’t see why we won’t be shortlisted,” was all he offered when asked if Bumi Armada was the front runner.
It is understood that the two Malaysian companies made the cut while several Indian companies which had bid for the lucrative job were dropped.
Among the Indian companies dropped include ABG FPSO Pvt Ltd, a unit of publicly-traded ABG Shipyard Ltd, Pipavav Defence & Offshore Engineering Co Ltd, Hind Offshore Ltd and Mercator FPSO Pvt Ltd, a unit of Mumbai-listed Mercator Ltd, sources said.
The contract is highly sought after as it involves the chartering of an FPSO with a storage capacity of at least 510,000 barrels, for a primary nine-year period with a further seven-year extension, in separate one-year options.
Considering ONGC floated a global tender back in mid-October 2011 inviting bids for “Charter hiring of FPSO for Cluster-7 marginal fields”, an award could be made anytime soon.
The offshore marginal fields located in West coast areas include B-192, B-45, and WO-24, collectively called Cluster-7.
ONGC is said to require the installation of four new unmanned wellhead platforms, drilling of 20 wells, laying of interconnecting pipelines, subsea manifolds while the produced oil will be processed on the FPSO, and the crude oil offloaded to a tanker to be transported to a refinery.
Alliance Research’s O&G analyst valued the nine-year contract at approximately RM1.5 billion to RM2 billion, at bareboat charter rates.
“It is lucrative, and could add on between RM40 million and RM50 million a year to Bumi Armada’s bottom line contribution,” she said yesterday.
Operations and maintenance (O&M) of the FPSO is slated to be the responsibility of the selected FPSO contractor, which would add on to the successful company’s bottom line.
For its six months ended June, Bumi Armada posted a net profit of RM181.63 million on the back of RM769.12 million in revenue.
According to its website, Bumi Armada has five FPSOs: Armada Perkasa, Armada Perdana, Armada TGT1, Armada Claire and Armada Sterling, while M3Nergy has the FPSO Perintis.