Yinson doubles order book
Oil and gas company secures Rm22bil project in Brazil
PETALING JAYA: Yinson Holdings Bhd has secured a Us$5.4bil (Rm22.65bil) contract from a Brazilian multinational oil company for a floating facility that can produce and store oil.
The 25-year contract is the company’s single largest win to date, doubling the size of its order book to Us$10bil.
The company, in a filing with Bursa Malaysia yesterday, said it was awarded the floating production, storage and offloading (FPSO) Marlim 2 project for the Marlim revitalisation project in Brazil by Petróleo Brasileiro SA (Petrobras).
The FPSO Marlim 2 project is Yinson’s maiden job in Brazilian waters and is one of several regional bids that the group has entered into.
According to a Bursa Malaysia filing, the contract period is for 25 years from the date of the final acceptance.
Yinson was awarded two letters of intent for the provision of an FPSO facility to the Marlim Field located offshore Brazil in the north-eastern part of the Campos Basin, as well as the operation and maintenance services during the charter phase of Marlim 2 FPSO.
In a statement yesterday, Yinson group CEO Lim Chern Yuan (pic) said FPSO Marlim 2 would be Yinson’s largest project to date, and that the group had been focusing on building its resources, capacity and expertise to meet the project’s delivery and timeline.
“This project further cements Yinson’s position as a global FPSO player, demonstrating the industry’s increasing confidence in our ability to deliver projects on time, and thereafter to maintain our excellent uptime and safety track record,” he said.
Yinson Production Pte Ltd CEO Eirik Barclay added that much of the needed groundwork and preparations to swing into high gear upon project award had already been completed.
“The team is excited and ready to demonstrate that we are able to meet the expectations of our client and project partner in realising this project.
“We are committed to giving our very best towards this project to contribute to the advancement of the energy industry in Brazil,” he said.
Yinson has three very large crude carriers (VLCCS) on hand to be converted to FPSOS. Typically, the asset conversion will take approximately 36 months.
Petrobras has targeted first oil for FPSO
Marlim 2 in 2023.
An analyst estimates that the capital expenditure required for the FPSO Marlim 2 would amount to Us$1bil.
“Yinson will not have any problems taking on another two more projects that it is currently bidding for.
“However, if Yinson secures the third project, there may be a rights issue to raise additional funds,” the analyst said.
Yinson has two more ongoing FPSO bids, one at the Parque das Baleias fields in Brazil, and another at Aker Energy’s Greater Pecan in Ghana. The bids are due to be finalised and awarded within this year.
Meanwhile, on Sumitomo Corp’s intention to collaborate with Yinson on the Marlim revitalisation project, the shareholder agreement pertaining to this collaboration is expected to be announced in due course.
In March 2019, Yinson and Sumitomo Corp had announced their intention to collaborate on the Marlim revitalisation project, in which Sumitomo would participate with an effective interest of at least 20% in the event of a successful bid by Yinson.
Trading in Yinson’s shares was suspended from Monday 9am until Tuesday 5pm, resuming yesterday. Yinson closed 15 sen or 2.2% higher at RM6.99, traded on a volume of 57,322 shares.