LSJOC to terminate Yinson FPSO contract

LSJOC, a company jointly owned by PetroVietnam and Petronas is set to terminate an FPSO contract with PTSC AP, a company owned by Malaysia’s Yinson, and Vietnam’s PTSC.

According to Yinson, LSJOC is terminating the contract as the company will be liquidated on June 30, 2017.

The vessel in question is the FPSO PTSC Lam Son, operating at LSJOC’s Lam Son field, offshore Vietnam. The charter contract with LSJOC started in June 2014. The contract was for a firm period of seven years with the option to extend for up to three years.

The total contract value, including the three-year option, had been set at $737.30 million (approximately RM2.35 billion).

Yinson said the contract is expected to terminate on June 30, coinciding with the liquidation of the LSJOC company. The company further said that under the terms of the charter, PTSC AP is entitled to an early termination payment which “will be ascertained in accordance with the terms of the Bareboat Charter.”

Notwithstanding the receipt of the notice, Yinson said, PTSC had informed PTSC AP that Petrovietnam intends to continue the petroleum operations at Lam Son Field using the same FPSO, despite the liquidation of LSJOC.

“PTSC AP reserves its contractual rights and remedies pursuant to the Bareboat Charter. Accordingly there is no material adverse financial impact to PTSC AP, YINSON will continue to work together with PTSC on future developments during the transition period,” Yinson said.

The bareboat charter was entered into in 2012 for the FPSO PTSC Lam Son for the field of Thang Long – Dong Do, Blocks 01/97 & 02/97, offshore the Socialist Republic of Vietnam (“Lam Son Field”). FPSO PTSC Lam Son has been operating in Lam Son Field since June 2014.

Offshore Energy Today Staff