The contract was awarded by India's BG Exploration and Production India Limited ("BG Exploration") for the provision of an Anchor Handling Tug and Supply ("AHTS") vessel to be used for marine oil and gas works within Indian waters. The 3-year charter contract commences in April 2007, and includes a two extension options of six months each on the same rates, terms and conditions.
Swiber's latest contract with BG Exploration follows close on the heels of a separate Letter of Intent (LOI) signed with the same company recently. The LOI with BG Exploration is for the provision of a spread of vessels for the transportation of jackets and decks within Indian waters, and is estimated to contribute approximately US$5.75 million to the Group's turnover in FY2007.
"It's exciting to announce this contract on a number of levels," said Raymond Goh, founder and Chief Executive Officer of Swiber. "Not only are we expanding our relationship with BG Exploration, a key player in India's oil and gas sector, we are also making very good progress with regards to our expansion into the Indian market."
"This contract will continue to strengthen Swiber's presence in India," added Mr Goh. "The company's decision to grow in India is driven by the fast-paced growth of the offshore oil and gas sector in India. India represents one of the most dynamic and fastest growing markets for offshore oil and gas activities, given the oil and natural gas resources in the country. We expect to see greater revenue contribution from this new market going forward."
"To effectively reach out to our customers in India, our intention is to establish an office there in 2007. We may also consider entering into strategic alliances for co-operation with parties such as engineering firms and offshore EPCIC contractors with the relevant experience in the offshore oil and gas industry in India," added Mr Goh.
Barring any unforeseen circumstances, the charter contract is expected to have a positive impact on the net tangible assets and earnings per share of Swiber for the financial year ending 30 December 2007.
None of the Directors or substantial shareholders of Swiber has any direct or indirect interest in the above contract.
Established in 1996, Swiber is a niche service provider to the offshore oil and gas industry, with a complementary business in the supply of marine support vessels.
BG Exploration is a subsidiary of BG India. The latter has been active in India for more than 10 years and is one of the largest foreign investors in India's oil and gas sector.
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