Bumi Armada to Pay $85M in Reimbursement, Liquidated Damages for FPSO

Malaysia's offshore energy facilities and services company Bumi Armada Berhad confirmed Thursday that it has concluded discussions with the charterers regarding the delay in delivery of FPSO Kraken Armada which is scheduled to be deployed to the EnQuest plc-operated Kraken field in the UK Sector of the North Sea, the firm said in a filing with stock exchange Bursa Malaysia.

Following the discussions, Bumi Aramda said the charter rates and charter term for the 8 year FPSO (floating production, storage and offloading vessel) contract will remain unchanged and the facility is targeted for sailaway later this year in accordance with new key dates agreed with the charterers.

Armada Kraken Pte Ltd. (AKPL) -- Bumi Armada's subsidiary -- will pay the charterers $20 million as "liquidated damages pursuant to the terms of the FPSO Contract".

Also, Bumi Armada pointed out in the disclosure to Bursa Malaysia that "in recognition of certain amendments to FPSO Contract scope agreed with the charterers, AKPL has agreed to pay the charterers an amount of $65 million during the course of the charter term, commencing from the first half of 2017. This represents a partial reimbursement of an upfront amount previously paid by the charterers."

First oil from the Kraken field is scheduled to flow in the first half of 2017, Enquest indicated Sept. 8 when it released its 2016 half year results.

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