- Feb, 2019
The oil and gas sector is losing a major competitor in the fierce market for offshore vessels. The Bumi Armada Berhad group is leaving Brazil. Headquartered in Malaysia, the company is considered one of the market giants operating FPSOs, in addition to providing offshore services. However, despite the great ambitions set for the country, the company was unable to convert its positive business prospects and opted to close its Brazilian operations.
Today, the company faces financial difficulties. Bumi reported losses of R $ 449 million in the third quarter of 2018. The balance of the last three months of last year has not yet been disclosed, but even so, the Malaysian group accumulates a negative result of R $ 930 million (about R $ 1.04 billion of Malaysian ringgits) between January and September 2018.
Investor confidence in the company is also low, with the company’s shares on the Malaysian Stock Exchange reaching minimum values between December and early January. This decrease is related to the concerns of the group’s indebtedness. According to consultants who analyze the financial market, Bumi Armada continues to negotiate an extension of the term of payment of $ 380 million in corporate term loans with a consortium of banks.
Bumi was present in Brazil through its Offshore Maritime Services business since 2012. The arrival in the country was considered strategic, since the company considered the national market as one of the most potential and promising in the world in terms of FPSOs. In the year it landed in Brazil, the company’s strategic planning anticipated an internal demand of 6 to 8 FPSOs from Petrobras and even from OSX – a company created by businessman Eike Batista to provide oil platforms and naval services to the former OGX.
The Malaysian company did not operate any vessels in Brazil, but it disputed important projects, as in the case of the FPSO for the field of Sepia, that was awarded to Modec. Bumi was also invited by Petrobrás to bid for the Libra platform vessel (Mero 1), another unit that ended up being conquered by Modec.
In fact, Bumi’s revenues in the Latin American market did not meet expectations. According to the company’s latest balance sheet, the continent represented a modest 2% in the total revenue composition. The most profitable regions for the group have been the Middle East and Africa, which now account for 42% of current revenues, according to the company’s balance sheet.
Source: Petronoticias
Leave a Reply