AsianOil: Bumi Armada, MISC consider merger of floating production businesses

Malaysia’s Bumi Armada is exploring a potential merger with the offshore division of MISC Berhad, a leading provider of offshore floating and energy-related maritime services. The pair signed a non-binding memorandum of understanding (MoU) on an all-share transaction to combine their offshore businesses on November 14, Bumi Armada reported.

The announcement follows speculation about a potential collaboration to strengthen their position in the offshore floating production sector. The MoU is valid for nine months from the signing date, or until a definitive agreement is executed or the MoU is terminated. While non-binding except for exclusivity and confidentiality clauses, it paves the way for discussions on creating a global leader in floating production.

Bumi Armada noted that the merger would establish a Malaysian-based, sector-focused entity combining the talent, engineering expertise and resources of both companies. This integration aims to enhance competitiveness in the capital-intensive floating production segment, where global demand is projected to rise, with 83 floating production storage offloading (FPSO) orders expected by 2030.

The potential merger could provide both firms with increased exposure to this growing market. However, Bumi Armada emphasised that there is no guarantee the discussions will lead to a final agreement, as further due diligence and negotiations are required.

In related news, Bumi Armada’s subsidiary, Armada TGT (ATL), recently secured a two-year extension for the FPSO Armada TGT1, servicing Vietnam’s Te Giac Trang (TGT) field. The contract, valued at approximately $74.4mn, runs until December 2026. The FPSO has demonstrated strong performance, with an average uptime exceeding 98% and no lost time incidents since commencing operations.

MISC has also been expanding its portfolio. In September 2024, the company entered a partnership with SBM Offshore to exchange ownership interests in two FPSOs. Earlier in the year, MISC unveiled what it described as the world’s first “future-ready” floating production storage and offloading (NBFPSO) vessel and joined forces with Petronas CCS Ventures and Mitsui OSK Lines (MOL) to establish a joint venture for owning liquefied carbon dioxide (LCO2) carriers.

If realised, the proposed merger between Bumi Armada and MISC could consolidate their strengths and position them as a major player in the global offshore energy market.