Yinson still upbeat about FPSO project

Kenanga Research said Yinson is still confident of securing the Parque das Baleias floating production storage and offloading contract.

PETALING JAYA: Yinson Holdings Bhd will continue to participate in the bidding of the Parque das Baleias floating production storage and offloading (FPSO) as it is confident it can secure the tender.

Kenanga Investment Bank Research in a report yesterday said Yinson's management has guided that it will continue to participate in the re-bidding of the Parque das Baleias FPSO.

“The group is still confident of securing the award, as it sees itself having a sizable advantage against any potential competitor, given that it already has a huge head-start in terms of engineering and project planning, thus giving the group a far more competitive costing structure,” it said.

Kenanga Research said the scope and technical specifications of the project would most likely remain the same, but the delayed first oil date could mean that the contract may only be awarded by the third quarter of 2021.

“We believe the re-bidding exercise would also almost certainly result in lower charter rates as compared with Yinson’s original tender.”

Maybank Investment Bank Research,meanwhile, said Yinson has the advantage over peers for the FPSO re-bid, in terms of knowledge of the project (with a short deadline) and capacity to take on new jobs.

“With Petrobas maintaining the technical specifications/work scopes for the project, Yinson will be ahead of its competitors, for it has undertaken most of the engineering/costing works. We also expect limited competition for this re-tender.”

On Oct 16, Petrobras said that it would not award the Parque das Baleias FPSO contract to the only qualified bidder, Yinson, but rather proceed with a rebidding exercise. The initial target of commissioning the FPSO in 2023 is now deferred by a year to 2024.

CGS-CIMB said this is the second major disappointment since the oil price crash in March.

“The first was Aker Energy’s decision to cancel its Ghana project, which was awarded to Yinson in February as a letter of intent for the charter of the FPSO Pecan, but was not yet formally awarded to Yinson as a firm contract.

“There had been hints from Petrobras itself, that it had deprioritised the Parque das Baleias redevelopment in favour of larger and more productive pre-salt fields in the Buzios and Mero fields. Hence, we had removed the PDB from our sum-of-parts target price.”

Kenanga Research said Yinson is bidding for other projects.

“Parque das Baleias aside, Yinson is currently eyeing to participate in bids for another two mid-sized FPSOs, namely Enauta’s Atlanta fields, off Brazil and Limbayong field, off Sabah. Awards for these projects are also expected to be in the later part of 2021.”

CGS-CIMB said if Yinson wins the Parque das Baleias project, it will probably embark on an RM500mil to RM700mil rights issue, because borrowing has become more difficult in the low oil price environment.

“Yinson may also do additional equity issues to fund its entry into renewables projects, which Yinson feels is an attractive place to invest in given what is happening in the FPSO space.”

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Yinson , FPSO , tender , Petrobras , Parque das Baleias


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