Woodside ends FPSO contract. Bumi Armada takes legal action

Malaysia’s Bumi Armada has received a notice of contract termination from Woodside for the Armada Claire floating, production, supply and offloading vessel operating offshore Australia. The vessel owner has deemed the termination unlawful and has decided to take legal action against the oil company. 

Bumi Armada’s wholly-owned subsidiary Armada Balnaves, has received a notice of termination from Woodside purporting to terminate the contract in relation to the charter of the Armada Claire FPSO which has been operating in the Balnaves Field, off north-western Australia since delivering first oil in August 2014.

“Bumi Armada’s position is that the purported 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,” the company said on Friday.

The company also said it intends to fully enforce its rights under the contract, including initiating legal proceedings against Woodside for its unlawful purported termination of the contract.

The vessel owner also said that the termination of the FPSO charter contract is expected to have an impact on the full year 2016 financial results of the company, the extent of which cannot be conclusively ascertained at this juncture as it will depend on the outcome of the company’s legal action against Woodside.

Bumi Armada signed the contract with Apache to provide the FPSO Armada Claire for the Balnaves Field  in September 2011. The contract was for an initial four years fixed term time charter with an option of a further four-year annual extension period. Australian oil and gas company Woodside bought Apache’s 65% interest in the Balnaves field in April 2015.

The 240 meters long FPSO Armada Claire, built in 1993 and refurbished in 2014, has an oil production capacity of 80,000 bpd and a storage capacity of 805,035 bbls. The FPSO has been designed with a disconnectable riser turret mooring system for cyclonic weather in 135m water depth.

Offshore Energy Today Staff