Bumi Armada tumbles to new low; uncertainty over FPSO contract



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KUALA LUMPUR (Nov 28): Bumi Armada Bhd’s share price fell to an all-time low of RM1.13 today, which analysts say is due to jitters over the expectation of falling global crude oil prices, and uncertainty over its RM3.76 billion floating production, storage and offloading (FPSO) contract.

Bumi Armada’s share price fell by 15 sen or 11.7% as at 2.55pm today, with about 42 million shares changing hands. It is the fourth most actively-traded counter on Bursa Malaysia.

Year-to-date, Bumi Armada has shed nearly 55%.

“The drop in Bumi Armada’s share price today is in line with the general fall in oil prices,” said the analyst, adding it could also be due to uncertainty over its US$1.18 billion (RM3.76 billion) contract to Husky-CNOOC Madura Ltd, after several delays.

The FPSO vessel supply contract will be terminated, should both parties fail to sign the contract yesterday.

“So far, we are still waiting for an update from management,” he said, adding the drop is also in line with the general fall in crude oil prices, which slid by 30% since mid-June.

The Organization of the Petroleum Exporting Countries’ (OPEC) meeting held yesterday (Nov 27), had also decided not to cut production quotas, which means crude oil prices is expected to slide further, over the short term.

Another O&G analyst who declined to be named, said it is “just a matter of time” before the contract is signed. “They are working on it,” the analyst added.