PETALING JAYA: Oil and gas services provider Yinson Holdings Bhd received a termination letter for the provision of a bareboat charter contract for an oilfield in Vietnam.
In an announcement yesterday, the company said that it was informed by the operating company of the Lam Son oilfield that they were terminating the services as the operator of the oilfield itself – Lam Son Joint Operating Company (LSJOC) – was going to be liquidated.
LSJOC is a jointly owned by PetroVietnam Exploration Product Corp and PC Vietnam Ltd, a wholly owned subsidiary of Petronas Nasional Bhd.
Yinson, together with PetroVietnam Technical Services Corp, set up a joint venture company (PTSC AP) to provide a floating, production, storage and offloading (FPSO) facility for the oilfield.
The FPSO has been operating in the Lam Son field since 2014 and the contract is for seven years. Yinson group chief executive officer Lim Chern Yuan said in a statement that PTSC AP would be entitled to compensation for the early termination of the contract and the exact amount has yet to be ascertained.
“We see this as an opportunity for Yinson to rebase its costs to provide a more cost-efficient solution for our future clients and to also immediately deleverage itself,” said Lim.
He also said that the joint venture company, PTSC AP, would continue to deploy its assets in the Lam Son oilfield despite the liquidation of LP in Vietnam. Towards this end, he said that PTSC AP was informed by its client of the intention to potentially continue deployment in Vietnam despite the liquidation of the operating company of the Lam Son oilfield. “While the rights and interests of our joint venture will be governed under the existing chartering contract, the team in Yinson, together with our joint venture partner PTSC, will collaborate closely to engage discussions with PetroVietnam to continue deployment of our FPSO on the field after June 30 2017,” Lim said.