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Company Update – Bumi Armada (ADD, maintain) - Hopeful for Kraken, Madura FPSO contract wins




Affin Hwang Investment Bank Bhd


03 Jul 2013





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Eyeing Kraken, Madura and 4 other FPSO contracts We recently met up with Bumi Armada’s management for an update on the group’s business prospects. We understand that Bumi Armada is bidding for 6 FPSO contracts, namely Kraken (North Sea), Madura (Indonesia), Belud (Malaysia), 2 in Nigeria and 1 in Angola. We are especially positive on the prospect of the Kraken and Madura FPSO contracts. Management guided that Bumi Armada is in a two-horse race (alongside Teekay) for the Kraken FPSO tender. EnQuest (operator of the Kraken field) will likely award the Kraken FPSO contract by end-July 2013 and the FPSO may cost a massive US$1bn. Separately, we understand that Husky Energy (operator of the Madura field) will likely award the Madura FPSO contract in 3Q13. To recap, the Madura field development was earlier shelved due to budget constraints but Husky has since decided to resume the development. There are 3 bidders for the Madura FPSO – Bumi Armada, Ezra and BW Offshore. Overall, we are positive on the FPSO outlook and we expect Bumi Armada to secure 1 FPSO contract in 2013.

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