Malaysia building world’s largest FPSO company?

Malaysia could be on track to being able to boast with having the world’s largest FPSO provider headquartered on the Malaysian peninsula.

Namely, The Malaysian business newspapers StarBizweek, The Star, and the Edge respectively, have reported of a potential move, according to which the nation’s biggest shipping company MISC could invest in the country’s largest offshore oil and gas vessels provider Bumi Armada.

According to The Edge, the potential deal would see MISC, controlled by Petronas, sell its FPSO business to Bumi Armada in exchange for shares in the company.

The Edge has cited an analyst who alleges that the deal would be a win for Bumi Armada, as it would open gates to obtaining future Petronas FPSO contracts.

Responding to media writings, both Bumi Armada and MISC have issued statements on Bursa Malaysia, without clarifying much.

A statement by Bumi Armada: “We refer to market speculation and recent articles in the media concerning Bumi Armada Berhad and MISC Berhad. The company continuously explores and evaluates merger, acquisition and disposal opportunities both locally and internationally that will add value to our shareholders. Should there be material developments in relation to any of the said opportunities, the company will make an announcement to Bursa Malaysia Securities Berhad in a timely manner in accordance with the Main Market Listing Requirements (MMLR) of Bursa Malaysia Securities Berhad”

MISC’s statement was similar to the Bumi Armada one: “MISC wishes to clarify that in the course of the Company’s day to day business and operations, the Company continuously explores and assesses opportunities and growth prospects.  Should such opportunities materialize and decisions are made to pursue them, the necessary announcement to Bursa Securities will be made in due course.”

Nevertheless, if proven to be true, this means that Bumi Armada could expand its Floating Production Storage and Offloading fleet by 6 units. It is unclear if the transaction would involve other floating offshore facilities owned by MISC, such as floating storage units, floating production units and semi-submersible production platform.

Counting FPSOs only, the merged entity would own 12 such units, plus three under construction. For comparison, SBM Offshore, currently the world’s largest provider of FPSO vessels, as of August 5, 2015, had a fleet of 10 FPSOs, and 3 units under construction.

 Offshore Energy Today Staff