Malaysian offshore contractor Bumi Armada has been granted a time extension to deliver a floating production, storage and offloading vessel for the Cluster 2 offshore project in India’s Krishna Godavari basin.

Bumi said in its latest quarterly report that the “charterer granted an extension of project completion until the end of 2022”.

India’s state-owned Oil & Natural Gas Corporation (ONGC) is the owner of the Cluster 2 development, located in the company’s prolific KG-DWN-98/2 deep-water asset offshore Kakinada, India.

The FPSO is under construction at Sembcorp Marine in Singapore but has been delayed “due to various reasons, including regulatory constraints imposed by the governments of various countries following the Covid-19 pandemic”, Bumi said in its previous quarterly report.

The FPSO contract was awarded three years ago to Bumi Armada and its joint venture partner Shapoorji Pallonji Oil & Gas.

The joint venture subsequently contracted Sembcorp Marine to convert the Ariake, a very large crude carrier, into an FPSO with production capacity of up to 90,000 barrels per day of oil and with storage space for 1.3 million barrels.

The FPSO charter contract is for a fixed period of nine years, valued at about 8.8 billion ringgit (US$2 billion).

National oilwell Varco’s APL division was subcontracted for a submerged turret production system, which acts as a conduit for the produced oil and gas, and enables the FPSO to freely weather vane.

Solid financials

Meanwhile, Bumi has reported solid quarterly financial results.

Net profit of 185.8 million ringgit in the quarter ending 31 March 2022 was an improvement from the previous three months of 118 million ringgit, and the profit of 162.8 million ringgit in the first quarter last year.

“The strong oil price augurs well for the oil and gas sector, which has witnessed increased activities across the entire value chain, including the floating offshore solutions segment. The group expects our existing business to be stable for the rest of 2022 and is pursuing new opportunities in targeted markets,” Bumi said in its quarterly report.

The company has six FPSOs operating around the world and one floating gas storage unit.

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