Bumi Armada diversifying into upstream R&P in Indonesia

KUCHING (March 13): Bumi Armada Bhd (Bumi Armada) has plans to diversify beyond floating, production, storage and offshore (FPSO) leasing into upstream ownership via two greenfield blocks in Indonesia, namely Akia and Kojo fields.

Both are still in early exploration stages and first production could only be after 2030, if successful, in Maybank Investment Bank Bhd’s research division (Maybank IB Research) view.

“We believe, that part of Bumi Armadaís goal is to eventually develop these projects using its own floating production systems, especially for Kojo as it is a deepwater/ultra-deepwater field,” it commented yesterday.

According to Upstream Online, Mubadala and Harbour Energy are aiming to take the project final investment decision (FID) of the Tangkulo field by June 2026.

It also stated that Bumi Armada is bidding head-to-head with another Malaysian-listed FPSO player for the front-end engineering and design (FEED) contract.

“We believe, this could be Bumi Armadaís chance to re-rate, if successful, as it would end concerns of its structurally depleting orderbook,” Maybank IB Research added.

“We highlight that a further contract extension is a possibility for TGT1 as the Te Giac Trang field received a five-year license extension till December 2031, which could pose upside risk to our forecasts in FY27.

“However, a successful bid for FPSO Tangkulo would be a crucial re-rating catalyst for Bumi Armada.”

Meanwhile, Maybank IB Research noted that the ongoing US-Israel and Iran conflict has no direct implications on Bumi Armadaís business/operations.

“However, we note that periods of heightened oil price volatility often result in slower project sanctioning, as oil majors adopt a more cautious stance on final investment decisions (FID) until price stability improves and project returns become more predictable.”

According to S&P Global, global offshore capex is projected to rise steadily, reaching US$211 billion by 2029 (from about US$150 billion in 2026).

This investment upcycle is expected to lead to a FPSO supercycle ñ in which MISC is looking to be a part of, in our view.

S&P Global is also expecting 8, 12 and 9 FPSO awards in 2026-2028, with large scale projects focused in South America and Asia-Pacific.

“However, we strongly believe that that Bumi Armada is only focusing on one specific bid at the moment, which is FPSO Tangkulo.

“We note that a job win at Tangkulo FPSO would be crucial to re-rate Bumi Armada. Separately, any potential revenue/cash flows from Akia and Kojo greenfield projects would likely only materialise after 2030.”