Bumi Armada Bhd., Malaysia’s largest operator of oilfield vessels, is seeking to borrow as much as $260 million from banks including Sumitomo Mitsui Banking Corp. to fund a tanker-conversion project.
The company won a contract to develop a floating production, storage and offloading vessel for the Te Giac Trang oilfield in Vietnam last month, Chief Executive Officer Hassan Basma said in an interview. Bumi Armada and its partner may spend $300 million on the project that is forecast to generate revenue of about $700 million over seven years, he said.
“It’s a bankable project,” he said from Bumi Armada’s headquarters in Kuala Lumpur yesterday. The company aims to secure financing before April and the borrowing rate may be lower than it got on a $190 million loan it obtained in August from seven banks including Sumitomo Mitsui and Australia & New Zealand Banking Group Ltd., for a project in Nigeria, he said.
Bumi Armada won the seven-year contract, its third floating production project, from Hoang Long Joint Operating Co., a unit of state-owned Vietnam Oil & Gas Group. Bumi Armada aims to secure its fourth contract of a similar size this week, Basma said, declining to provide details.
The vessel operator, a unit of Malaysian billionaire Ananda Krishnan’s Usaha Tegas Sdn., expects to secure contracts to build one or two floating production vessels every year, a move that would help it overtake Single Buoy Mooring UK Ltd. as the world’s largest owner of such vessels within 10 years, Basma said. Krishnan also controls Malaysia’s biggest mobile-phone operator, Maxis Bhd.
Kyosuke Hattori, a spokesman for Sumitomo Mitsui in Tokyo, said he couldn’t immediately comment.
The Te Giac Tranc oil field, known as White Rhinoceros, is located off Vietnam’s coast in the northern part of Block 16-1 in the Cuu Long Basin, the company said on its Web site. Oil production may begin in the second quarter of 2011, he said. Bumi Armada’s vessel will have a production capacity of 45,000 barrels of oil a day and 1 million barrels of storage. The contract also covers offshore installation, hook-up and commissioning of the production vessel, it said.
Bumi Armada has bought a Suezmax tanker from Great Eastern Shipping Co., an Indian company, to be converted for the project, Basma said.
Bumi Armada seeks fund for tanker-conversion project in Vietnam
Malaysia’s largest operator of oilfield vessels is seeking to borrow as much as $260 million from banks to fund a tanker-conversion project in Vietnam.
Source: Bloomberg
