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Yinson Vietnam FPSO contract cancelled as operating company to fold

Yinson Vietnam FPSO contract cancelled as operating company to fold
Malaysian FPSO vessel player Yinson Holdings has had a major Vietnam contract worth $737m cancelled, as the operating company that it had chartered its vessel to, is being wound up, the company said in a stock market announcement.

Lam Son Joint Operating Company (LSJOC) a joint venture between units of Petroliam Nasional (Petronas) and PetroVietnam awarded the bareboat charter contract for an FPSO to PTSC Asia Pacific in 2012, and was for a fixed primary term of seven years starting June 2014. The early termination leaves the contract has four years left to run.

PTSC Asia Pacific, is a joint venture between Yinson and PetroVietnam Technical Services Corp (PTSC).

The FPSO PTSC Lam Son has been operating in the LSJOC-operated Lam Son Field offshore Vietnam since June 2014.

The contract cancellation, due to be effective on 30 June 2017, is due to the liquidation of LSJOC, which is scheduled to occur on the same day, Yinson reiterated.

It added that it is entitled to an early termination payment (ETP) in the terms of the contract, but said the exact quantum of the ETP would be determined based on the terms of the bareboat charter.

Yinson also pointed out that the project was still ongoing and there was still a requirement for the asset. “Notwithstanding the receipt of the notice, PTSC had informed PTSC Asia Pacific that Vietnam Oil & Gas Group (PetroVietnam), the ultimate holding company of one of the shareholders of LSJOC, has the intention for the petroleum operations to continue at Lam Son Field despite the liquidation of LSJOC. It is the intention of PetroVietnam to continue to utilise FPSO PTSC Lam Son for this purpose,” it said.

Yinson said PTSC Asia Pacific reserved its contractual rights and remedies pursuant to the bareboat charter.

“Accordingly there is no material adverse financial impact to PTSC Asia Pacific, Yinson will continue to work together with PTSC on future developments during the transition period,” the company added.

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