INTRODUCTION
We refer to the announcements made by Bumi Armada Berhad ( Bumi Armada or the Company ) on 19 August 2014, 14 October 2014, 31 October 2014, 12 November 2014 and 4 December 2014 in respect of the Letter of Intent ( LOI ) issued by Husky-CNOOC Madura Limited ( HCML ) for the award of a contract to supply one floating, production, storage and offloading vessel ( FPSO ) ( Contract ) to a consortium comprising of the Companys wholly-owned subsidiary, Bumi Armada Offshore Holdings Limited ( BAOHL ) and its joint venture company, PT Armada Gema Nusantara ( PT AGN ) (collectively referred to as the Consortium ) at the BD Field in the Madura Strait, Offshore East Java, Indonesia ( Madura BD Field Development ).
Bumi Armada is pleased to announce the signing of the Contract yesterday evening in furtherance of the LOI. The effective date of the Contract is 8 August 2014.
DETAILS OF THE CONTRACT
The Contract is for a firm charter period of ten (10) years with options of five (5) annual extensions. The estimated aggregate value of the Contract is approximately USD1.18 billion (equivalent to approximately RM3.98 billion).
The FPSO is expected to commence operations in the Madura BD Field in the fourth quarter of 2016.
BAOHL, a wholly-owned subsidiary of Bumi Armada, was incorporated in the Republic of the Marshall Islands Business Corporations Act 1990 as a Marshall Islands Corporation on 17 June 2010 and is principally involved in the business of owning, chartering, managing of ships and vessels, provision of marine support and other services to offshore oil and gas companies.
PT AGN is an Indonesian joint venture company of BAOHL and PT Gema Marine Services.
HCML is an oil and gas company based in Jakarta, Indonesia. The shareholders of HCML are CNOOC Southeast Asia Limited, Husky Oil Madura Partnership and SMS Development Limited holding 40%, 40% and 20% in HCML respectively.
FINANCIAL EFFECT
The Contract will contribute positively to the earnings of the Bumi Armada Group for the quarter and financial year ending 31 December 2014 as well as the financial periods thereafter for the duration of the Contract.
RISKS ASSOCIATED WITH THE CONTRACT
The risks associated with the Contract are normal operational risks which are well understood by the Company and being mitigated through Bumi Armadas system of project management and internal business controls.
DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS
None of the Directors and/or major shareholders of the Company or persons connected to them have any interest, direct or indirect, in the Contract.
This announcement is dated 11 December 2014.