Bumi Armada Goes to Court over FPSO Charter Termination

Malaysia-based offshore services provider Bumi Armada Berhad has decided to take legal action against the Australian oil and gas company Woodside following a notice to terminate the charter contract for the company’s Armada Claire floating production storage and offloading (FPSO) unit.

In a recent statement, Bumi Armada said that the notice of termination “is not valid, and in fact tantamount to a cancellation for convenience or alternatively, is a repudiation of the contract by Woodside, pursuant to which the company is entitled to compensation from Woodside.”

Bumi Armada added that it intends to fully enforce its rights under the contract, which include initiating legal proceedings against Woodside for its “unlawful” purported termination of the contract.

The company said that this FPSO charter contract termination is expected to have an impact on its full year 2016 financial results, however it is not known to which extent as it will depend on the outcome of the legal action against Woodside.

The 1993-built FPSO has been operating in the Balnaves Field off north-western Australia since delivering first oil in August 2014.