Parque das Baleias FPSO no longer a ‘sure-win’ for Yinson

KUALA LUMPUR: The rebidding of Parque das Baleias FPSO has been viewed as a negative by analysts, as the project is no longer a “sure-win” for Yinson Holdings Bhd (Yinson).

The research arm of Kenanga Investment Bank Bhd (Kenanga Research) recapped that Petrobras has called for a rebid for the Parque das Baleias FPSO after reportedly pushing back the project’s first oil date by a year to 2024.

“We believe this is to induce further pricing competition from FPSO providers in hopes of getting a lower and more competitive charter rate for the FPSO,” Kenanga Research said.

“In the original tender, Yinson emerged the sole bidder with both parties in exclusive negotiations for the past one year, but the project has failed to materialise nonetheless.”

The research arm believed Petrobras’ limited bargaining power during negotiations, given the lack of options for FPSO providers, coupled with the weakness in oil prices, may have prompted the company to re-launch the bidding with hopes of attracting more pricing competition.

Kenanga Research gathered that management has guided that Yinson will continue to participate in the re-bidding of the Parque das Baleias FPSO.

“The group is still confident of securing the award, as it sees itself having a sizable advantage against any potential competitor, given that it already has a huge head-start in terms of engineering and project planning, thus giving the group a far more competitive costing structure.

“Scope and technical specifications of the project will most likely remain the same, but the delayed first oil date could mean that the contract may only be awarded in the third quarter of current year 2021 (3QCY21).

“We believe the re-bidding exercise would also almost certainly result in lower charter rates as compared to

Yinson’s original tender.”

On another note, the research arm also gathered that Parque das Baleias aside, Yinson is currently eyeing bids for another two mid-sized FPSOs: Enauta’s Atlanta fields, off Brazil and Limbayong field, off Sabah.

“Awards for these projects are also expected to be in the later part of CY21.”

The group is still confident of securing the award, as it sees itself having a sizable advantage against any potential competitor, given that it already has a huge head-start in terms of engineering and project planning, thus giving the group a far more competitive costing structure.