This article first appeared in The Edge Malaysia Weekly on February 14, 2022 - February 20, 2022

Yinson Holdings Bhd appears to have its hands full for the next two years. Last week, the transportation and logistics company sealed agreements with Petrobras of Brazil to deliver another floating production storage and offloading unit (FPSO) to the South American oil and gas giant by end-2024. This further expands Yinson’s footprint in the highly competitive Brazilian market.

The company already has five FPSOs in operation — two in Nigeria and one each in Ghana, Malaysia and Vietnam.

The company is constructing one FPSO  — the Anna Nery — to be delivered to state-owned Petrobras next year and has received the letter of intent from Enauta Energies SA, a private company, to provide another vessel for the Santos oilfield last December.

The latest contract was to be awarded in 2020 but was delayed until this year because of the pandemic. Yinson is the sole bidder for the US$5.2 billion (RM22.5 billion) job.

Effectively, it needs to complete an FPSO next year and work on another to be delivered by end-2024, and could land another if the Enauta Energies provisional award materialises.

FPSOs are highly technical in nature and require strong project integration skills. Apart from technical prowess, FPSO suppliers also need to have a strong balance sheet to face possible delays in commissioning.

Towards this end, Yinson plans to raise RM1.22 billion from shareholders. This comes as the company’s gross borrowings increased more than 50% last year, owing largely to the construction of the FPSO Anna Nery. 

The last time Yinson carried out a fundraising was in 2014 and it managed to complete four FPSOs without hiccups. Can it repeat the feat this time around?

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