Bumi Armada’s latest FPSO vessel forecast to buoy performance

PETALING JAYA: UOB Kay Hian Research (UOBKH Research) says more clarity is needed on the first oil production of floating production, storage and offloading (FPSO) vessel Armada Sterling

V (ASV5) for the KG-DWN 98/2 field in the Bay of Bengal.

The FPSO vessel is a 30:70 joint venture (JV) between Bumi Armada Bhd and India-based

Sharpoorji Pallonji.

“We think ASV5 progressing to operations is a net positive development, but more clarity is needed,” the research house said. It added that Bumi Armada’s management had shared that it had been recognising standby rates since March last year.

“The Us$930mil loan facility achieved financial close on Sept 9, 2023, although this is still contingent on certain conditions such as receiving the final acceptance certificate,” the research house noted.

Careedge, the previous rating agency for the project loan, had said the capital expenditure incurred was about Us$1.17mil.

The FPSO would be chartered to India’s Oil and Natural Gas

Corp Ltd or ONGC for nine years, it added.

UOBKH Research noted that it made no changes to its 2023-2025 earnings forecasts of Rm601mil, Rm676mil and Rm711mil, respectively, for Bumi Armada.

“We retain our forecasts for now.

“The growth will be largely driven by an improvement in the

FPSO performance after suffering many setbacks prior to 2020,” it said.

Meanwhile, analysts are upbeat about Bumi Armada’s outlook for the fourth quarter of 2023.

This is as its FPSO Kraken would be up and running and most likely achieve a 100% utilisation rate.