Australia’s Woodside Energy has triumphed in its protracted legal battle with Malaysian floater contractor Bumi Armada over the historic charter of the Armada Claire floating production, storage and offloading vessel, effectively bringing the case to a close.
Woodside in March 2016 issued a notice of termination of its charter of the Armada Claire that was working on the operator’s Balnaves oilfield offshore Western Australia. Woodside said the contract termination was due to "performance-related issues” but Bumi claimed that its contract was “wrongfully terminated”.
The FPSO had been on contract since August 2014 under a four-year fixed charter with extension options.
Bumi Armada sought legal redress relating to Woodside’s termination of the services agreement for the Armada Claire FPSO, a case that was heard in 2019.
The Supreme Court of Western Australia in January 2020 delivered its judgement in Woodside's favour, dismissing Bumi Armada's main claim.
However, the Malaysian player subsequently appealed the Supreme Court’s decision to the Western Australian Court of Appeal and the appeal was heard last July.
The WA Court of Appeal on 24 June found in Woodside’s favour and dismissed Bumi Armada’s appeal.
Bumi Armada posted a net loss in the second quarter of the 2016 calendar year after booking non-cash impairments of 575.5 million ringgit (US$130.5 million in today’s money), the majority of which related to Woodside’s decision earlier that year to terminate the Armada Claire’s lease.
In April 2016 the floater contractor filed claims in the WA Supreme Court seeking at least US$283.5 million from Woodside over the cancellation. Upstream reported on 26 August 2016 the operator had terminated the contract following poorer than expected reservoir and operating performance of the Balnaves asset.
Woodside had earlier said it expected the remaining payment obligations under the Balnaves FPSO lease to be between US$120 million and US$140 million.
The 99,800-deadweight tonne Armada Claire — the former Griffin Venture — has storage capacity of 130,602 cubic metres. The newbuild, which Samsung Heavy Industries delivered in late 1993, was subsequently converted and refurbished by Keppel Shipyard in Singapore for its gig at Balnaves.
The out of work floater is currently anchored at Galang off the Indonesian island of Batam, according to VesselsValue.