Yinson Production’s Ebitda to reach US$900mil

Yinson Production, a subsidiary of Yinson Holdings Bhd, is poised to enhance its financial performance with the upcoming launch of its largest floating production, storage, and offloading (FPSO) vessel, the Agogo. Expected to generate nearly US$900 million in annual cash earnings before interest, taxes, depreciation, and amortization (Ebitda), the FPSO Agogo is set to sail for Angola next week. The project, which was completed three months ahead of schedule, is anticipated to achieve first oil as early as late August or early September.

Significant Project Milestones and Financial Impact

The FPSO Agogo, converted from a tanker in just 24 months, will operate in the Agogo Integrated West Hub Development Project in Block 15/06 offshore Angola. This project is under a 15-year firm charter with Azule Energy, a joint venture between BP and Eni, and has a total contract value of up to US$5.3 billion. Yinson Production’s CEO, Flemming Gronnegaard, highlighted that the early completion of the Agogo has significantly boosted the project’s internal rate of return (IRR). He noted that early delivery enhances returns dramatically, which is crucial for the project’s financial viability.

The Agogo FPSO is designed to produce 120,000 barrels of oil per day and can process 180,000 barrels of liquids daily. It also has the capacity to compress 230 million standard cubic feet of gas per day and store up to 1.6 million barrels of oil. The vessel incorporates advanced carbon reduction technologies, including a closed flare system and a pilot post-combustion carbon capture system, which are expected to reduce carbon emissions by up to 27%.

Yinson Production’s Chief Operating Officer, Jahn Atle Hogberg, reported strong cash Ebitda growth over the past year, driven by successful deliveries of previous FPSO projects. The company aims to secure new FPSO projects, targeting at least one new contract per year. To support this growth, Yinson Production has secured a US$1 billion redeemable convertible preference shares deal, with plans to use US$800 million for upcoming FPSO projects. The company is strategically focusing on regions such as South America, West Africa, and Asia, which account for 75% to 80% of its business, while remaining open to opportunities beyond these areas.