Woodside Petroleum Ltd., Perth, has terminated its contract with Malaysia’s Bumi Armada for the charter of the Armada Claire floating production, storage, and offloading vessel, which is stationed in Balnaves oil field in the Carnarvon basin offshore northwest Australia.
The vessel has been there since the field came on stream in August 2014.
Balnaves lies 180 km northwest of Karratha in production lease WA-49-L and the production facilities comprise four subsea wells—two horizontal producers, one horizontal water injection well, and one gas injection well—which are tied back to the FPSO.
In 2014 the field produced 2 million bbl of oil and Woodside estimated economic ultimate recovery to be 6.7 million bbl (1P) and 9.8 million bbl (2P).
However the contract termination may be headed for the courts as Bumi Armada believes the purported notice of termination is invalid. The company says it is a cancellation of convenience or a repudiation of the contract by Woodside and Bumi is therefore entitled to compensation from Woodside.
Bumi intends to enforce its rights under the contract, including the initiation of legal proceedings.
The contract to supply and operate Armada Claire was originally signed by Apache Energy in September 2011 for an initial 4-year fixed term time charter with an option for a four-year extension.
In 2015 Woodside acquired Apache’s interest in Balnaves field in addition to Apache’s stake in Wheatstone and Kitimat fields in a $2.75-billion deal (OGJ Online, Apr. 7, 2015).
Woodside now operates WA-49-L and has a 65% interest while Kuwait Foreign Petroleum Exploration holds the balance.
