Bumi Armada JV nets three-year FPSO charter in India

Malaysian oilfield services firm Bumi Armada, in partnership with Shapoorji Pallonji Energy (SP Energy), has clinched a significant contract with ONGC for the bareboat charter of the Armada Sterling II Floating Production Storage and Offloading (FPSO) vessel. This agreement will see the vessel continue its operations at ONGC’s Cluster 7 field, located approximately 210 kilometers off the west coast of Mumbai. The contract, finalized last Friday, marks a pivotal moment for both companies.

Contract Details and Financial Implications

The bareboat charter agreement is set to commence on March 8 and will last for a fixed term of three years, with an option to extend for up to three additional years. The total estimated value of this initial three-year period is RM451.4 million (approximately $106 million). The Armada Sterling II, which was built in 1998 and converted into an FPSO by Keppel Shipyard in Singapore in 2014, was previously operating under a nine-year charter that expired in March 2022. This contract was extended for an additional year before the new agreement was reached.

ABS Approves FPSO Newbuild Hull Design Concept from Shapoorji Pallonji Energy

In addition to the bareboat charter, Bumi Armada and SP Energy have also secured a second contract with ONGC through their joint venture, SPAOGSPL. This contract involves the operation and maintenance of the Armada Sterling II and mirrors the terms of the charter agreement, lasting three years with three annual extension options. The value of this maintenance contract is RM127 million (around $29.8 million), and it will also take effect on March 8.

These contracts signify a strong commitment from both Bumi Armada and SP Energy to support ONGC’s operations in the region, reinforcing their strategic partnership and enhancing their presence in the offshore oil and gas sector.