BUOYANT MOOD

YINSON Holdings Bhd is upbeat on its floating production, storage and offloading business this year. It expects to win more projects on back of recovery in the global oil and gas industry, says group chief executive officer Lim Chern Yuan.

WITH the recovery in the global oil and gas (O&G) industry, Yinson Holdings Bhd is optimistic of its floating production, storage and offloading (FPSO) business this year.

Group chief executive officer Lim Chern Yuan said the integrated offshore production and support services provider was positive on the industry, particularly in FPSO bidding activities.

“Over the past few years, there was under-investment in the O&G business. However, activities are catching up and we expect a lot of projects will be awarded in a short period,” he said after the company’s annual general meeting yesterday.

Lim said Yinson had secured the Layang FPSO charter contract from JX Nippon Oil & Gas Exploration (M) Ltd in May with aggregate value of US$860 million (RM3.48 billion) via associate company Yinson Energy Sdn Bhd. As of May 31, Yinson’s order book stood at US$4.3 billion, which would keep the company’s earnings visibility until 2037.

Lim said Yinson was in an exclusive negotiation with First Exploration & Petroleum Development Co Ltd, a Nigeria-based company, to process hydrocarbons from the Anyala and Madu fields off Nigeria.

He said the company was hopeful of concluding the agreement by September.

Lim said Yinson was on the lookout to bid for some projects, but it would be dependent on the company’s ability to meet the capacity.

Lim said Yinson had been building up a good balance sheet and human resources in preparation to take on projects this year.

“It’s not about wining more projects. It is about winning good, solid projects and that has been our way of reviewing the business.”

He said the company was confident the demand for FPSO charter business would improve in two years.

“It is possible for our operation team to reduce cost but not at the expense of increasing future cost. Sustainability is a big part of our business in terms of earnings.”

Lim also believed there would be not many FPSO players as the segment required intensive capital and good track record.

“We look at projects all the times. They have to be the right strategic value with the right pricing. During the last three years, we have seen many assets available for acquisition.

“Now we want to continue strengthening our FPSO business in terms of people, balance sheet and number of assets.”

Yinson’s FPSO business mainly involves the African and Asian continents, but the company has also identified the American region for potential bidding activities.

Recently, Yinson completed its 26 per cent asset divestment of John Agyekum Kufuor for the FPSO segment in Ghana.

“We received US$117 million. A big chunk will be used to reinvest in our FPSO business,” he said.