Vietnam: Yinson-PTSC JV loses $1B FPSO charter

Yinson-PTSC JV has lost a $1 billion contract for the supply of an FPSO for Repsol’s Ca Rong Do field offshore Vietnam, due to “prolonged force majeure.”

The PTSC CRD joint venture in 2017 signed the $1B bareboat charter contract for the supply of the FPSO over a 10-year period, however, in March 2018, Repsol’s subsidiary Talisman Vietnam, the operator of the Ca Rong Do field, 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.”

At the time, it was not clear what this meant for the FPSO charter, however, Yinson on Monday, September 17, said the contract has been canceled.

Yinson said: “On 16 September 2019, PTSC CRD, a 49%-owned entity of Yinson, received a notice from PTSC informing that the Bareboat Charter Contract will be terminated due to a prolonged force majeure event pursuant to the terms therein. The effective date of the termination will be determined upon discussions between TLV and PTSC.”

The PTSC CRD said it would assert its rights “under all relevant contracts and in laws, for any advances, claims, liabilities, losses and/or damages against or suffered by it in any way concerning the matter.”

This is the second contract termination related to the Ca Rong Do field in as many days. Namely, the U.S. oil equipment firm Dril-Quip said Monday it Repsol had canceled the Tensioned Riser (TTR) systems supply order for the offshore Vietnam field.

As previously reported, UK’s BBC last year said, citing an unnamed source, that PetroVietnam had 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.