PETALING JAYA: The potential winning of Eni S.p.A.’s Agogo floating production, storage and offloading (FPSO) vessel contract would be positive for Yinson Holdings Bhd
, says RHB Research.
Eni is an Italian multinational oil and gas company headquartered in Rome
Upstream, a global oil, gas and energy news resource, reported that Yinson has emerged as the frontrunner for the engineering, procurement, construction and commissioning (EPCC) contract that will deliver a FPSO vessel for Eni’s Agogo project, in offshore Angola.
“It was also reported that Yinson, together with Bumi Armada Bhd and Italy’s Saipem, were bidding for the project.
“In the same Upstream article, sources said that Eni will sign a letter of intent with Yinson imminently, with a commercial contract likely to be finalised later this year,” RHB Research said in a report yesterday.
If Yinson wins the project, the research firm said it would be positive for the group’s growth prospects. “We previously guided that the capital expenditure could be at least US$1bil (RM4.5bil).
“In terms of the charter period, it was reported by Upstream in May that the floater is required for a period of up to 20 years, despite not being able to confirm the charter period,” it added.
Meanwhile, RHB Research said it would not be surprised if Yinson is expecting certain upfront payments from the client (to cover vessel costs) as part of the terms.
If Yinson managed to seal the deal by the end of this year, a 36-month conversion period would be just in time to achieve first oil by 2026, said the research house.
“Our estimate conservatively suggests a RM0.22 increase to our target price (of RM2.83) if a deal is struck,” it said, pointing out that it had yet to impute this project win into its target price.
The FPSO is designed to produce 120,000 barrels of crude oil (bbl) per day and store about 1.6 million bbl for the full-field development of Agogo’s second development phase.
