Bumi Armada has suspended the bare-boat charter (BBC) and operations and maintenance (O&M) contracts on the FPSO Armada Perdana to Erin Energy Corp. due to delayed and irregular payments.
The deals are between Bumi Armada’s wholly owned subsidiaries Armada Oyo Ltd. (AOL) for the FPSO, and Bumi Armada (Singapore) (BASPL) for the O&M work, with Erin subsidiary Erin Petroleum Nigeria.
The suspension of operations is due to longstanding delays in the BBC payments due to Bumi Armada, as well as irregular payments on the O&M contract.
“This situation has been brought about by Erin’s refusal to provide us with a clear structure of how they intend to comply with the contractual agreements as well as repay the amounts owing to Bumi Armada, despite our repeated attempts to resolve the situation amicably,” says Leon Harland, Bumi Armada executive director and CEO. “This situation has gone on long enough and Bumi Armada has taken the decision to enforce its rights under the contracts and to be paid in accordance with the contractual terms. The Group is willing to work with our clients to reach mutually agreeable solutions during challenging times or events, on a good faith basis. However, such solutions must be sufficient and reasonable, as a resolution to the outstanding amounts that Erin owes to Bumi Armada.”