It had acquired a 49.998% stake or 24,999 shares in India firm SP Armada Oil Exploration Pte Ltd. The acquisition was to facilitate future expansion plans and operations of the company.
SP Armada, an oil & gas company will now be a “jointly-controlled” entity of Bumi Armada, with the remaining 50.002% stake of SP Armada held by India-based Shapoorji Pallonji & Co Ltd.
The move was to buy a shell company to grow the business in India where there were still a lot of oil fields to develop. It looks like a complement to Bumi Armada's prior JV with Forbes & Co. The company could be looking at support vessels, marine support and other services in line with its main floating production, storage, off-loading (FSPO) jobs business.
Bumi Armada may be also setting up such firms as vehicles to bid for contracts in India.
Bumi Armada has previously formed a joint-venture firm with Forbes & Co called Armada D1 Pte. The JV firm was reported to have sought RM879.2mil (US$280mil) under an eight-year loan at the end of 2011.
A source had said that Armada D1 was also looking to borrow RM314mil (US$100mil) in a so-called bridging loan with a maturity of less than one year.
Forbes & Co is controlled by billionaire Pallonji Shapoorij Mistry, who is also the single largest shareholder in India's largest private conglomerate Tata Group.
Meanwhile Bumi Armada is set to win big contracts from Petronas, especially floating production, storage, off-loading jobs (FPSO)and marginal field projects, which could re-rate the stock. It is expected to secure the lucrative risk service contracts (RSCs) for Petronas’ marginal fields in 2012.
Its order book stood at RM7.2 billion (excluding a joint-venture FPSO project in India worth RM1.9 billion) and strong three-year earnings compounded annual growth rate of 26 per cent.
Its excellent track record and synergistic oil and gas services, especially FPSO solutions, may appeal to foreign oil companies seeking to rope in a local partner for RSCs.
Its excellent track record and synergistic oil and gas services, especially FPSO solutions, may appeal to foreign oil companies seeking to rope in a local partner for RSCs.
Bumi Armada is keen to bid for marginal fields and its new oil field services division sends a strong signal that it is leveraging on its expertise to aggressively bid for RSCs, which are believed to command 11-20 per cent Internal Rate of Return.
FPSO tenders were picking up and Bumi Armada would bid for more FPSO contracts in Malaysia as more jobs take off.
The FPSO tender process for Petronas’ RM15 billion North Malay Basin development had started, with the contract slated to be awarded by year-end (2012) to meet production by 2013.
FPSO tenders were picking up and Bumi Armada would bid for more FPSO contracts in Malaysia as more jobs take off.
The FPSO tender process for Petronas’ RM15 billion North Malay Basin development had started, with the contract slated to be awarded by year-end (2012) to meet production by 2013.
Meanwhile, the FPSO tender for the "ONGC Cluster 7" marginal fields in India has started and Bumi Armada is likely to bid for it.
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