More jobs for Bumi Armada by 2013

Bumi Armada could expect to see more positive news of floating production storage and offloading (FPSO) contracts towards the end of this year, says Alliance Research Sdn Bhd.

The research firm said Bumi Armada was actively tendering for projects and have been reported to be close to snagging contracts in India, Africa and/or Malaysia.

“Bumi Armada, through its wholly-owned subsidiary recently secured an extension contract for one year from Afren Energy Resources Ltd for the bareboat charter and, operations and maintenance, valued at RM100 million.

“The contract for the FPSO was first awarded in 2007 for a firm five-year period with options to five annual extensions,” Alliance Research said in a research note today.

It said the contract renewal was expected but the value of RM100 million was below its expectation of RM130 million.

Alliance Research has maintained a “buy” call on Bumi Armada. Meanwhile, another research house has maintained a “hold” call on the group citing increased competition, execution risk and unusual high portion of vessel dry docking or under repairs as factors.

Hong Leong Investment Bank in a statement said: “We like Bumi Armada because of its reputation of supplying reliable storage, timely FPSOs delivery and ability to provide deep water solutions for marginal field work.

“However, we maintain our view that in a growingly competitive FPSO landscape, we prefer contracts to be secured before a potential rerating.” — Bernama