Bumi Armada seeks US$283.5 million from Woodside

20 April 2016, Week 16 Issue 522

International service provider Bumi Armada has demanded US$283.5 million in damages from Australia’s Woodside Petroleum in a legal battle over a cancelled floating production, storage and offloading (FPSO) vessel contract.

The company said in an April 21 filing to Bursa Malaysia that wholly owned unit Armada Balnaves Pte Ltd (ABPL) had served a statement of claim in the Supreme Court of Western Australia against Woodside Energy Julimar on April 20.

At issue is Woodside Energy Julimar’s termination of a charter contract for the Armada Claire FPSO vessel. ABPL had filed a writ of summons on March 14 seeking an unspecified amount of damages from the Woodside subsidiary.

ABPL said in the April 20 statement of claim that it was seeking US$275.8 million – the amount of the termination payment to which it was entitled had the contract been terminated without breach – and also US$7.7 million for work done and materials supplied.

“Bumi Armada is of the view that there are reasonable grounds to expect a favourable outcome in respect of ABPL’s primary claim against Woodside on the repudiation of the contract,” Bumi Armada said. “Notwithstanding the foregoing, the award of damages in the event of a favourable outcome is subject to final determination by the court. Bumi Armada will continue to provide updates from time to time on any further material development on this matter.”

Bumi Armada’s legal move against Woodside comes at a time when the Malaysian company is pushing ahead with its strategy of focusing on its core FPSO vessel business.

It also comes as Bumi Armada struggles amid tough market conditions. The company said in late February that it had slipped into the red in 2015, posting a net loss of 234.6 million ringgit (US$59.4 million) in 2015, compared with a net profit of 218.7 million ringgit (US$55.3 million) in 2014. The company’s revenue declined 9.1% to 2.18 billion ringgit (US$551.7 million) in 2015, compared with 2.4 billion ringgit (US$607.5 million) in 2014.

Edited by

Andrew Kemp

Editor

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