INTRODUCTION
The Board of Directors of Bumi Armada Berhad ("Bumi Armada" or the "Company") wishes to announce that its joint-venture company, Shapoorji Pallonji Armada Oil & Gas Services Pte Ltd (India) ("SPAOGSPL") has received a Notification of Award from Oil and Natural Gas Corporation Limited ("ONGC") of India, effective from 8 March 2025, for the operation and maintenance (“O&M”) of the Armada Sterling II Floating Production, Storage and Offloading vessel ("Armada Sterling II FPSO") deployed at the ONGC Cluster-7 Field located off the west coast of Mumbai, India ("O&M Award"). The terms and conditions of the O&M Award are being finalised into an O&M contract to be signed by ONGC and SPAOGSPL.
INFORMATION ON THE O&M
The O&M is effective from 8 March 2025, for a fixed period of 3 years with an annual option to extend the charter for up to 3 additional years. The fixed 3-year firm O&M period has an estimated total value of INR2.5 billion (approximately RM127.0 million).
SPAOGSPL is 60%:40% owned by Shapoorji Pallonji Energy Pvt Ltd and Bumi Armada (Singapore) Pte Ltd, a wholly-owned subsidiary of Bumi Armada. ONGC is India's state-owned oil company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd (NSE).
FINANCIAL EFFECTS
The O&M is expected to contribute positively to the future earnings of Bumi Armada Group during its tenure. The O&M will not have any effect on the share capital and substantial shareholders’ shareholding of the Company.
RISKS ASSOCIATED WITH THE O&M
The risks associated with the O&M are expected to be normal operational risks on the efficiency and reliability of the Armada Sterling II FPSO in terms of vessel performance, people capability as well as Health Safety Security Environment and Quality performance. These risks can be mitigated through Bumi Armada's system of project management and internal business controls as well as past experience with the same joint venture partner for several FPSOs in India.
APPROVALS REQUIRED
The O&M is not subject to the approval of the shareholders of Bumi Armada. Save for ONGC’s agreement on the terms of the O&M contract, the O&M is not subject to any approvals or consents of any other authorities.
DIRECTORS AND MAJOR SHAREHOLDER’S INTERESTS
None of the Directors and/or Major Shareholders of the Company or persons connected with them have any interest, direct or indirect in the O&M.
STATEMENT BY DIRECTORS
The Board of Directors, after having considered all aspects of the O&M, is of the opinion that the O&M is in the best interest of the Company.
This announcement is dated 7 March 2025.
* Based on the exchange rate of INR100 : RM5.0806 on 7 March 2025 as set out in Bank Negara Malaysia’s website.