This morning we have the news that Yinson Holdings Bhd’s
associate firm PTSC Asia Pacific Pte Ltd (PTSC Asia Pacific) has received a
notice of termination of a bareboat charter contract for a floating production
storage and offloading system (known as FPSO PTSC Lam Son) valued up to US$737mil
(RM3.3bil) awarded by Lam Son Joint Operating Company (LSJOC), which is a joint
venture between Petroliam Nasional Bhd (Petronas) and PetroVietnam.
LSJOC is the operator of the Lam Son field offshore Vietnam while
the PTSC Lam Son has been operating in Lam Son Field since June 2014. PTSC
Asia Pacific is a 49:51 joint venture between Yinson and PetroVietnam Technical
Services Corp (PTSC).
Yinson advised the following:
- The contract cancellation is scheduled to occur on June 30, 2017
- Despite the termination, PetroVietnam - the ultimate holding company of one of the shareholders of LSJOC – intends to continue the petroleum operations at Lam Son Field despite the liquidation of LSJOC and to continue to utilise FPSO PTSC Lam Son for this purpose (How??)
- PTSC Asia Pacific is entitled to an early termination payment (ETP) from PTSC
- PetroVietnam owns 51% of PTSC Asia Pacific as well as 50% of LSJOC. This means that PetroVietnam has a pecuniary interest to find a solution for a redundant FPSO
- The charter contract is a bareboat charter, which means that the cost of reinstating the FPSO in its original condition will be borne by LSJOC
Chart: Yinson's daily chart as at Apr 3, 2017 (Source: Malaysiastock.biz)
Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.
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