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Something interesting in Malaysian newspaper today (The Edge):
"Adding spice to the incident is the equipment provider of the HSP downplaying the problems, stating that Bumi Armada’s announcement gives the impression that there is a failure of its pumps.
According to a report, Celeros Flow Technology said the shut-in was due to a failure of “critical motor supply transformers on the topside for the HSP lift system”. It added that the topside equipment was more accessible than well equipment, which could prove more costly to fix.
Well equipment relates to subsea operations, which is more difficult and costly to repair."
Anyone knows what this means?
The Enquest Investor Relations team had responded to multiple of us on the forums that they expected to get started (at a lower capacity) by the end of the week...can anyone confirm if we're back to producing at Kraken?
@RonnieH,
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"Yeah been unless they have a really high floor Enquest won’t be any better off
The tax is 35%. If they set the floor at say $70 then Enquest are still bogged down. The government has to set a really high floor for this to positively benefit
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I would presume the EPL floor would work on a progressive basis, i.e. if the floor is set at $70 per barrel of oil, and the cargo of oil is sold at $80 per barrel, then only $10 per barrel will be subject to the EPL.
Any chance it would not be "material" for Enquest because of any of the following?
1) Insurance coverage for the loss of production due to outage (not sure if this is even available)
2) Reimbursement from Bumi Armada due to loss of production due to outage (again, unsure if this is something that could be written into the contract)
Also, might I ask, who would bear the cost of repairs? Enquest, or Bumi Armada, or insurance?
Seems like a whole bunch of misinformation.
FPSO Kikeh's contract was renewed for 6 years in Malaysia last year. It is ultimately owned by Petronas, why would they send it off half way around the world in a hurry?
https://www.offshore-mag.com/production/article/14224133/kikeh-fpso-nets-longterm-extension-offshore-malaysia
@MitoeCPS,
Thank you for sharing your insights. Might I ask, were production to come back online this week, would it be in phases? If so, how will it be done? What is the maximum capacity they could theoretically operate at without repairing the HSP? How long would it take to order the replacement HSP, and then get it fixed?
Someone else shared this link, but numerous Malaysian analysts covering Bumi Armada (Hong Leong, UOB, CIMB etc) are quoting 6 months. Not sure how all seem to arrive at the same number of months.
I do not make stuff up, and am here to get some clarity on the situation.
Did they spend any time at all about the Kraken shut-in? Bumi Armada lost about a quarter of its market cap today. Analysts are penciling in a minimum of 6 months offline. I am rather bemused this isn't being taken any more seriously on this board.
How significant is the ICOP document on Kraken, which showed high strain on the FPSO way back in 2021? Is it game over, so far as the Armada Kraken FPSO is concerned?
Referring to this: https://www.enquest.com/fileadmin/content/operations/ICOP_PDFs/EnQ_ICOP_Kraken_2021_07_F.pdf
Hi all,
What's the consensus on the severity of this issue? Bumi Armada made an announcement to the stock exchange about the shut-in of the Kraken field last Friday. It is highly unusual, as they have experienced shut-ins / issues at other fields but never disclosed it via a bourse filing.
My take is it might be rather severe, taking many months to fix, and hence they went to the extreme of making an official disclosure. On the other hand, they might've just been playing it safe and production might resume and return to normal in 3-4 weeks. I don't expect it to take any shorter, given the wording of their statement.
It's rather peculiar that Enquest being the field operator have not said a word thus far. Isn't Kraken one of their prized jewels?
Also, for those attending the AGM later, appreciate if you could press this issue with Amjad and the crew, and update us on just how bad it looks to be.
With the latest Operational Update, and the pushing back of the drilling at Kraken, what does this mean for the Kraken field in particular, as well as the nearby Bressay / Bentley fields?
I read someplace in Malaysian analyst report covering Bumi Armada (the FPSO operator at Kraken) that Enquest is considering NOT extending the option to the Armada Kraken FPSO contract due to the fact that the vessel cannot be fully electrified. Is that the reason they are forgoing any further development at Kraken for the time being?
The vessel was chartered on a 8F + 17O contract - the 8 firm years will be up in 2026.
Full context as follows:
"However, Some FPSOs will be tougher to decarbonise, just as Emission concern is causing a change in FPSO power source from traditional gas turbines to imported green electricity.
"Enquest said the FPSO Kraken is “impossible to electrify” due to the swivel configuration - we believe may likely refer to the difficulties of high-voltage transmission for weather-vaning, shipshape FPSOs - this might explain why Dnex’s Ping Petroleum opted for a cylindrical shaped FPSO for its Avalon development. The alternative methods are being explored, but not without their challenges.
"Although purely an analyst’ guess and not to be construed as an immediate share price threat, we think some FPSOs long term DCF may eventually be discounted if they are not technologically modifiable to meet emission standard. There may also be an actual contractual impact from this ESG perspective, ie Kraken less likely to be extended beyond the firm expiry of mid-25, unless contract amendments ensue."