Bumi Armada Gets LOIA for North Sea FPSO

Bumi Armada Berhad announced today that EnQuest Heather Limited together with EnQuest ENS Limited, First Oil and Gas Limited, Nautical Petroleum Limited and Nautical Petroleum AG have via a Letter of Interim Agreement (“LOIA”), confirmed their intention to award a contract for the supply and operations of a floating production, storage and offloading vessel (“FPSO”) to, Bumi Armada UK Limited, a wholly-owned subsidiary of Bumi Armada, to operate in the Kraken field (UKCS Block 9/02b) in the UK sector of the North Sea.

Kraken is one of the largest current development projects in the UK North Sea with an anticipated production life of up to 25 years. The LOIA is intended to allow Bumi Armada to proceed with critical activities and the procurement of long lead items, ahead of the final award, which is expected to be signed before 30th November 2013.

First oil is anticipated in 2016/2017.

Chief Executive officer/Executive Director of Bumi Armada, Mr. Hassan Basma said, “The North Sea contains western Europe’s largest oil and natural gas reserves and is one of the world’s key non-OPEC producing regions. The North Sea contains significant reserves that have yet to be developed. We expect that the heavy oil production technology applied in the Kraken FPSO will unlock similar heavy oil reserves in the North Sea and other parts of the world. Our first time entry into the North Sea ushers in a new era in our relentless stride to join other similar contractors competing on their strength in execution competency and value add services. It underscores our strategy of delivering cost effective harsh environment FPSO operated under a strict regulatory regime.”

The Kraken field is a large accumulation of heavy oil in the East Shetland Basin of the UK North Sea and the field is prone to harsh weather to its exposed location. The Kraken field lies in Block 9 some 350 kilometers (km) north east of Aberdeen, Scotland, and 420 km west of Stavanger, Norway.

The FPSO will have a storage capacity of 600,000 barrels. The FPSO will be moored by a buoy turret mooring system. The FPSO will be built to strict regulatory guidelines as defined by the UK Health and Safety Executive (HSE) and Department of Energy & Climate Change (DECC) and will be classed by DNV. Bumi Armada will also assume the ‘Duty Holder’ role towards the HSE and DECC. The Duty-Holder’s role requires Bumi Armada to operate under a ‘Safety Case’ regime for the second time after its earlier FPSO project for the Apache Energy’s Balnaves field, offshore Australia.

Mr Hassan Basma added, “The Kraken FPSO, which takes our fleet of FPSOs to 7, places Bumi Armada firmly in the top league of FPSO players. This is a testimony to our track record and focus on safety and quality built up over the years.”

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Press Release, November 15, 2013