Nigerian FPSO shut over debt  

Erin Energy  the  operators  of  Oyo field  on  Oil Mining License (OML 120)  has suffered a set back as Malaysian FPSO provider Bumi Armada has suspended the bareboat charter and operations and maintenance contracts with  the company for the FPSO Armada Perdana operating at the Oyo oil field off Nigeria.

Bumi’s subsidiaries, Armada Oyo Limited (AOL) and Bumi Armada (Singapore), are in charge of the bareboat charter and operations and maintenance contracts on the FPSO Armada Perdana for Erin Petroleum Nigeria Limited, a subsidiary of Erin Energy.

Bumi Armada informed in a Bursa Malaysia filing on Wednesday that the suspension of operations is due to longstanding delays in the bareboat charter payments due to Bumi Armada, as well as irregular payments on the operations and maintenance contract.

BusinessDay effort at get the reaction  of  the  company  from its  Lagos  office has not been successful as the  person who  picked the phone when the  office was called said a letter must be written before anybody  in the management  team  would talk  on   the  matter

After issuing notices of overdue payment and letters of demand requesting immediate payment of undisputed outstanding sum to Erin’s Nigerian subsidiary, Bumi claimed that Erin has not responded.

Therefore, Bumi Armada (Singapore) is suspending the performance of its obligations under the O&M contract, except for the critical maintenance and other activities to mitigate occupational health and safety and environment risk, and AOL is suspending the performance of its obligations under the charterparty. Both suspensions are effective from 12.00 p.m.Lagos time on June 21, 2017.

The FPSO Armada Perdana has been deployed to work at the Oyo field since 2008 and the production from the field started in December 2009. It has a production capacity of 40,000 barrels of oil per day, and storage capacity of 1.1 million barrels. The associated gas is re-injected into the Oyo field reservoir to maximize oil recovery.

 

Olusola  Bello with agency  report