UPDATE: Yinson’s FPSO PTSC Lam Son stays in Vietnam

The article below has been updated to include the duration and the value of the FPSO contract in Vietnam. New information emerged on Thursday afternoon.

Malaysia’s Yinson has, through its Vietnam JV PTSC AP, entered into an interim contract with Vietnam’s PTSC to charter FPSO PTSC Lam Son for the petroleum operations within the Lam Son field, offshore Vietnam.

PTSC AP is a joint venture company owned by Yinson and PetroVietnam Technical Services Corporation (PTSC) each holding 49% and 51% interest in it, respectively.

To remind, the original contract PTSC AP had for the FPSO was terminated last year as LSJOC, the company that had contracted the FPSO for the operation at Lam Son field, was liquidated.

In a statement this week, Yinson said that PTSC had on March 26 signed an interim deal with PetroVietnam for the time charter of PTSC FPSO Lam Son backdated to July 1, 2017, pending the appointment of PVEP as the official operator of Lam Son Field.

Yinson did not initially say how long the vessel is expected to stay in Vietnam. Info found on the company’s website shows the FPSO as having a firm contract until 2021, with an option to extend until 2024.

However, when pressed for more details by Bursa Malaysia, Yinson on Thursday said the interim contract would be effective from July 1, until December 31, 2018 (Maximum Tenure) or an earlier date if it is terminated “pursuant to termination of the time charter interim contract or if a new charter contract is executed (thereby superseding the interim contract).”

Yinson said that the value of the interim contract is approximately $27.3 million, based on the December 31, 2018, expiration date.

The Lam Son FPSO is capable of producing 15,000-20,000 barrels of oil per day (bopd) and has a storage capacity of up to 650,000 barrels of oil.

While the Lam Son FPSO contract news is positive for PTSC AP, the JV is looking closely at Repsol and the Ca Ron Do field in Vietnam.

Force majeure

Namely, the joint venture’s $1 billion, ten-year, FPSO contract with Repsol in Vietnam might be in jeopardy following reports that Vietnam has ordered Repsol to halt work on Ca Rong Do field amid pressure from China.

Repsol’s subsidiary Talisman Vietnam, the operator of the Ca Rong Do field, has informed PTSC of a force majeure event directing the oil company “not to carry out the scheduled work program on the CRD Project for the time being.”

In a statement on Tuesday, Yinson, a partner in PTSC Ca Rong Do Ltd JV with Vietnam’s PTSC, said the JV sought clarification from Talisman on the nature of the alleged force majeure event, including particulars of how Talisman’s performance of its obligations under the FPSO has been affected.

“PTSC CRD will continue to monitor the situation closely and will assert its rights under all relevant contracts and in laws, for any claims, liabilities, losses, and/or damages against or suffered by it in any way concerning this matter,” Yinson said on Tuesday.

UK’s BBC has reported, citing a well-placed source, that PetroVietnam has ordered Repsol to suspend its Ca Rong Do work, to avoid confrontation with China due to the maritime border issue in the South China Sea. This could, a BBC source said, lead to Repsol losing $200m in investments already made.

The Ca Rong Do field development, located in Block 07/03 offshore southern Vietnam, is planned for development using a tension leg wellhead platform (TLWP), a tender assisted drilling vessel, and a floating production storage and offloading (FPSO) vessel.

Offshore Energy Today Staff