Bumi Armada to pay $85m for Armada Kraken FPSO delays

Bumi Armada said it had agreed to make the payment following a mutual agreement due to the revised sail-away date of the vessel and the revised production date of the first oil in the first half of 2017.

“The revised sail-away date of the FPSO from the Keppel conversion yard is in October 2016,” it said. According to the original contract, first oil was supposed to be produced this year.

The vessel will be deployed at the Kraken Field at the UK Sector of the North Sea.

Bumi Armada said that $20m was payment of liquidated damages under the FPSO contract and it was made on 14 September.

The remaining $65m would be made through a partial reimbursement of the upfront amount previously paid by the charterers under the FPSO contract.

The $65m would be paid in installments with $38m payable between February 2017 and February 2018, and the balance payable on a quarterly basis over a two year period starting three months after the date of production of first oil.

Bumi Armada has had senior management issues recently with its long serving ceo Hassan Basma stepping down at the end 2014. The Kraken field contract was signed at the end of 2013.