Bumi Armada Secures RM578M in FPSO Contracts, Signals Strong Upstream Stability

Bumi Armada Berhad (BAB), a key player in the floating production storage and offloading (FPSO) market, has secured two significant contracts via its joint ventures with India’s Oil and Natural Gas Corporation Limited (ONGC), effective March 8, 2025. The first, through Shapoorji Pallonji Armada Oil & Gas Services Pte Ltd (SPAOGSPL), involves operation and maintenance (O&M) of the Armada Sterling II FPSO, valued at RM127 million (INR2.5 billion). The second, via Armada C7 Pte Ltd (AC7), covers a bareboat charter lease for the same FPSO, worth RM451.4 million (USD101.9 million). Both contracts span three years, with an optional three-year extension.

Bumi Armada

MIDF views these awards as a long-term positive for BAB, signaling stable upstream activity in India’s Cluster 7 Field, where the FPSO operates, boasting reserves of 345 million barrels of oil and 11.1 billion cubic meters of gas. BAB’s expertise in FPSO operations and robust project management are expected to mitigate risks, leveraging past JV experience. The contracts align with BAB’s existing financial projections, reinforcing MIDF’s unchanged FY25 forecast. With a target price of RM0.70 and a BUY recommendation, MIDF remains optimistic about BAB’s financial uplift from 2025 onward, driven by these deals.

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