Chibisi Ohakah

Nigerian-based oil and gas company, Century Energy Services, has bought Armada Perdana floating production, storage and offloading (FPSO) vessel owned by Kuala Lumpur-based floater player Bumi Armada on a deal of $40-million.  

Reports said Bumi Armada Bhd is also currently looking for buyers for its 39 offshore support vessels (OSVs) and non-utilised floating production storage and offloading (FPSO) vessels. Upstream reported on Monday that the Armada Perdana FPSO has been out of contract in Nigeria since its previous charterer, Erin Petroleum, and its parent company Erin Energy Corporation filed for bankruptcy under Chapter 11 of the US Bankruptcy Code in April 2018. Century Energy plans to redeploy the FPSO to another field in Nigeria.

Investigations reveal that the purchase price comprises a required deposit of $5.5 million, of which Century Energy has advanced $4.5 million Bumi Armada’s wholly-owned subsidiary, Armada Oyo Ltd (AOL), with the remaining $1 million payable before the end of 2019. A further $11.6 million will be used to settle amounts owing.

“To secure the unpaid portion of the purchase price, Bumi Armada will hold a mortgage over the Armada Perdana FPSO,” the company said in a filing with Bursa Malaysia on last Friday. “The group will recognise the unpaid portion of the purchase price as and when funds are received from CESL.

“The gain to be recognised for the financial year ending December 31, 2019 will be approximately US$5 million. The conclusion of the sale of the Armada Perdana FPSO will absolve the group from its demobilisation obligations,” Bumi armada said.

To recap, Bumi Armada suspended operations on Armada Perdana in June 2017 after irregular payments from Erin Petroleum Nigeria Ltd but allowed continuing oil produced to flow into Armada Perdana and a one-off cargo intake by Erin. In April 2018, Bumi Armada received a notice from Erin advising of a purported “Force Majeure Event” and requesting immediate shutdown of operations on the FPSO Armada Perdana. The company was also served a notice to seize the entire crude oil produced and stored in Armada Perdana in Nigeria.

Later in October 2018, Bumi Armada received notice that a manager in Nigeria will be appointed to oversee the sale and disposal of the crude oil stored on Armada Perdana. A portion of the sale proceeds will be used to partially settle outstanding amounts owed to Bumi Armada’s unit, Bumi Armada (Singapore) Pte Ltd (BASPL).

CESL is one of the largest providers of O&M services, executed in conjunction with its partners -for FPSOs- in the Gulf of Guinea. The company provides training and manpower services and also provides community liaison and logistics support for our FPSO operations as well as for other IOCs operating in the Niger Delta.

Be the first to know when we publish an update

Be the first to know when we publish an update

Leave a Reply