Bumi Armada in lead for Eni East Hub FPSO

Leading the race: Bumi Armada chief executive Hassan Basma

Malaysia’s Bumi Armada is leading the race for a contract to supply Eni with a floating production, storage and offloading vessel for its East Hub project in Block 15/06 off Angola, although a deal has not been finalised.

A number of market sources said Bumi has the edge over its only remaining rival, Milan-based Saipem, although one Angola-based project watcher urged caution, saying until state oil player Sonangol rubber-stamps the proposed award, things could change.

One key factor in Bumi’s emergence as current favoured bidder for this order — which would mark is debut in Angola — is thought to be Saipem’s perceived move away from the FPSO business.

Last month, Saipem sold its Firenze FPSO off Italy to operator Eni, with its chief executive Umberto Vergine saying the deal reduced its “exposure to activities which I don’t consider core to the business, and is in line with Saipem’s objective to optimise the financial structure.”

Industry sources said the East Hub contract was originally set to be announced in October, but it is unclear exactly the reason for the delay.

Some sources attributed it to ­local content issues, others to ongoing high level, executive moves within Sonangol which are affecting decision-making, and yet others to the more mundane reasons of Christmas and New Year holidays.

In terms of local content, it is unclear exactly what Eni’s strategy is for the East Hub FPSO.

One source said the original invitations to tender made very little mention of local content but pointed out that Sonangol is highly unlikely to allow an order to be placed without at least some domestic yard involvement.

The Paenal yard is the only facility able to handle FPSO-related work, but it is believed that there has been no formal approach by Bumi — or Saipem — to use the Porto Amboim site.

Paenal’s shareholders are Sonangol, Daewoo Shipbuilding & Marine Engineering plus SBM Offshore, a rival of Bumi Armada and for whom its chief executive, Hassan Basma, used to work until 2005.

There is even speculation that SBM may be lurking in the background to snare the East Hub job if a deal with Bumi falls apart, ­although this could not be confirmed.

Within Sonangol, changes are happening “mostly at high levels”, said a source in Angola.

Chief executive Francisco de Lemos Jose Maria, two years into the job, is finally trying to get his “own people” into key positions, with a key focus on boosting Sonangol’s technical competencies.

“Sonangol has been operating with people who have been in management since the early 1990s and who have created their own empires,” said the source.

Jose Maria began his tenure by making a few minor changes within Sonangol but now, said the Luanda-based source, he has made a major decision to bring fresh and younger blood into key executive roles.

“He has changed things drastically. The untouchables have been touched this time,” the source said.

Eni’s East Hub development is focused on exploiting the Cabaca North and Cabaca Southeast discoveries, first oil from which is set to flow in 2016 or 2017. The FPSO is similar in size to the N’goma floater to be supplied by SBM for use on the West Hub project in Block 15/06.

West Hub involves the conversion in Singapore of the former Xikomba floating production, storage and offloading vessel.

Renamed N’goma, the vessel is expected to handle about 100,000 barrels per day of oil with initial development centred on the N’goma, Sangos and Cinguvu finds.

East Hub calls for 23 wells to be tied back to a second 100,000-bpd FPSO and will likely host existing and future discoveries.

Eni’s recent Olombendo discovery could be one potential satellite to the new FPSO.

•• Bumi Armada, headed by chief executive Hassan Barma, has signed a letter of intent with US-based Camac Energy covering a five year extension of its Armada Perdana FPSO lease contract in Nigeria.

A final deal, including a two-year option, could be agreed by the end of this month.

The FPSO, which can process up to 40,000 bpd of oil, is currently handling 2000 bpd from the Oyo field in OML 120.

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