A worker passes a floating production, storage and offloading (FPSO) vessel modified and upgraded by Keppel Shipyard for Malaysia-based Bumi Armada in their shipyard in Singapore in this February 8, 2014 file photo. Singapore rig builder Keppel Corp Ltd took a S$230 million writedown in the fourth quarter on Sete Brasil-related orders, dragging its quarterly profit down by 44 percent and pushing its full-year profit to the lowest level since 2010. REUTERS/Edgar Su/Files
KUALA LUMPUR: Bumi Armada Bhd
, which is challenging the termination of a RM1.46bil charter agreement involving its vessel Armada Claire, said the contract would only expire in August 2018.
The company said the agreement, signed between its unit Armada Balnaves Pte Ltd (ABPL) and Apache Energy Ltd in September 2011, was to provide and charter a floating production storage and offloading (FPSO) vessel for an initial fixed term charter of four years expiring in August 2018.
There were options for four annual extensions.
“The contract was subsequently novated to Woodside Energy Julimar Pty Ltd in May 2015,” the offshore oilfield services provider said in response to Bursa Malaysia Securities’ request for more details.
The Armada Claire was chartered for the Balnaves field, located off northwest Australia, where the FPSO has been operating since delivering first oil in August 2014.
According to Bumi Armada, the charter contract was valued at about RM1.46bil at the time of award. It did not say why the value might change, whether the payment was supposed to be made in another currency or whether any payment had been made so far.
ABPL, which received the purported notice of termination on March 4, 2016, takes the position that it was not valid.
Bumi Armada declined to reveal details of the events and/or circumstances leading to the termination notice.
“As ABPL intends to fully enforce its rights under the contract, including initiating legal proceedings against Woodside for its unlawful purported termination of the contract, it would not be appropriate to provide further comments at this stage as to the circumstances leading to the purported notice of termination, in order not to prejudice its rights on this matter,” it replied.
Bumi Armada said it would disclose the relevant details “at the appropriate time, as soon as it is able to do so.”
On recourse available to Bumi Armada and its unit, the company said the contract was governed by the laws of Western Australia. “Legal remedies (including damages for breach of contract) will be sought in the courts of Western Australia.”
Bumi Armada said ABPL was not a major subsidiary and the notice of termination was not expected to have any material impact on the operations of the group’s other FPSO vessels.
In its earlier announcement, Bumi Armada said the contract’s termination was expected to impact the financial results of the group for full-year 2016.
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