Bumi Armada to Challenge Woodside's Termination of Armada Claire FPSO Deal

Malaysia's offshore oil and gas facilities and services provider Bumi Armada Berhad indicated Friday that its wholly owned subsidiary Armada Balnaves Pte. Ltd.

(ABPL) has received a termination notice from Woodside's Petroleum Ltd.'s unit Woodside Energy Julimar Pty Ltd. for the Armada Claire Floating Production Storage and Offloading (FPSO) unit now operating in the Balnaves field, offshore north western Australia. "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 in a press release. The firm added that it "intends to fully enforce its rights under the Contract, including initiating legal proceedings against Woodside for its unlawful purported termination of the Contract" for the FPSO which has been operating at the Balnaves field since delivering first oil in August 2014. Bumi Armada said the purported termination of the FPSO charter contract is likely to have an impact on its full year 2016 financial results, which the firm cannot conclusively ascertained at the moment given its dependence on the outcome of its legal action against Woodside. Apache Energy Ltd., the operator of the Balnaves field before Woodside acquired the former's upstream interest in Australia in December 2014, signed a four year fixed term $357.1 million (MYR 1.46 billion) contract, including a further four year annual extension period thereafter, for the FPSO in September 2011.