Yinson eyes Ghana FPSO job

Yinson Holdings Bhd (Yinson) is a frontrunner to secure the first floating production storage and offloading (FPSO) contract award in Ghana, West Africa.

Following a company’s visit, analysts said the management of Yinson remains upbeat on the prospect to secure the contract in the near future.

The research arm of Maybank Investment Bank Bhd (Maybank IB Research) in a report said Yinson is a leading contender for the first FPSO job in West Africa.

The research firm noted the Ghana government has approved Italian Eni SpA (Eni) in which the company through its subsidiary Eni Ghana Exploration and Production Ltd, is the operator of the US$6 billion Sankofa Gye Nyame Deepwater Offshore Cape Three Points (OCTP) Block oil and gas project.

Should Yinson secure the FPSO contract, Maybank Research noted the company will convert its already purchased Samsung-built tanker, Ulriken which was bought for US$27 million to mobilise for the job.

The research firm observed that the potential contract win could lift Yinson’s FPSO or floating storage and offloading (FSO) vessel fleet size to five and further consolidate its position among the top 10 FPSO provider in the world.

Furthermore, the job could enhance Yinson’s earnings growth beyond 2016 and provide an estimate of additional RM160 million per annum to Yinson’s bottom line.

The OCTP oil and gas project requires a FPSO and a gas pipeline ashore while the FPSO contract charter would be likely be on a 15 5 year basis with the first oil production estimated to be in the middle of 2017.

Maybank IB Research pointed out that the FPSO contract has less risk compared to other commercial FPSO as national oil corporation backed Ghana National Petroleum Corporation (GNPC) has a 15 per cent working interest in the project.

It believes the oil and gas project has recoverable oil reserves of 131 million barrels and 1.15 trillion cubic feet of gas reserves will can be commercialised.

Furthermore, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) said Yinson are looking to acquire two 5,000 brake horsepower (bhp) anchor handling tug supply (AHTS) vessels with deliveries in the second quarter of 2015 that will be chartered out to boost the earnings of the company’s marine division.

The research firm noted such vessels are targeted for the international markets to expand their service range offering and supplement its earnings base.

Apart from that, Yinson is targeting to divest its non-oil and gas division namely transport, trading and ports businesses by next year.

The research firm said Yinson will be focusing on the oil and gas business moving forward.

Besides that, RHB Research Institute Sdn Bhd (RHB Research) believes that Yinson will be able to further enhance its orderbook next year.

The research firm is confident by Feb 2015, Yinson’s orderbook will likely be US$2.1 billion supported by US$1 billion from FPSO contract.