Bumi allows one-off Oyo cargo offtake to Erin to enable debt payment
Malaysian FPSO provider Bumi Armada has allowed Erin Energy to flow its oil from the Oyo field offshore Nigeria into the Armada Perdana FPSO cargo tanks and a one-off cargo offtake despite Erin’s outstanding debts towards the FPSO owner.
As a reminder, Bumi Armada suspended the bareboat charter and operations and maintenance contracts with Erin Energy for the FPSO Armada Perdana in June due to longstanding delays in the bareboat charter payments to Bumi Armada, as well as irregular payments on the operations and maintenance contract.
The vessel owner then in August allowed the oil company to flow the produced oil into the FPSO cargo tanks despite outstanding payments.
Bumi Armada informed in a Bursa Malaysia filing on Thursday that, further to a meeting with the representatives of the Department of Petroleum Resources (DPR) of Nigeria and Erin, its subsidiaries had permitted the continuing flow of produced oil into the Armada Perdana FPSO cargo tanks and a one-off cargo offtake.
A substantial portion of the proceeds from sale of the cargo will be used for payment to Bumi’s entity Armada Oyo Limited (AOL) in partial settlement of outstanding amounts due from Erin to AOL. However, the suspension of services under both the operational and maintenance service contract and bareboat charterparty contract remains in place.
“Bumi Armada continues to engage with EPNL in an effort to seek an amicable solution for repayment of the total outstanding amounts,” the FPSO owner said.
The FPSO Armada Perdana has been deployed at the Oyo field since 2008 and the production from the field started in December 2009. The vessel has a production capacity of 40,000 barrels of oil per day, and storage capacity of 1.1 million barrels. The associated gas is re-injected into the Oyo field reservoir to maximize oil recovery.
Earlier this week, Erin announced the completion of the Oyo-9 well. The well results were in line with predictions and confirmed field extension to the western part of the field. However, due to chronic delays in the release of the remaining funds and improper interference by the guarantor of the loan facility, Erin decided to temporarily suspend the completion and hook-up of the development program at the Oyo field.
Offshore Energy Today Staff