KUALA LUMPUR (July 6): MISC has secured a 16-year charter contract with an estimated contract value of US$441 million (RM1.78 billion), commencing latest by Sept 1 this year.

In a filing with Bursa Malaysia today, MISC said it has signed a long-term charter contract with Hess Exploration and Production Malaysia BV (HESS) for the lease of a floating, storage and offloading facility (FSO) known as FSO Mekar Bergading on a bareboat basis.

Bareboat Charter refers to the lease (charter) of an entire vessel under an agreement whereby the lessor only provides the vessel, and operation of the vessel is undertaken by the charterer.

MISC said the contract is pursuant to a sale and charter agreement in respect of the FSO with HESS, which resulted in MISC acquiring ownership of the FSO from HESS.

HESS, a Netherlands company, is a global independent energy company engaged in the exploration and production of crude oil and natural gas.

In a statement today, MISC said the investment is consistent with the MISC2020 strategy, one of the targets of which is to achieve a sustainable level of secured profit by year 2020.

MISC also said it has been exploring opportunities to diversify the profit stream contribution across all business segments, including acquisition of assets that are able to give the company secure and sustainable income.

MISC president and group chief executive officer Yee Yang Chien said under the MISC2020 strategy, the game plan for offshore business includes pursuing acquisition opportunities in the domestic and international market.

"The steady oil price recovery in recent months and renewed interest in growth opportunities have led to increase of activities in the offshore segment. This makes good sense for us to take advantage of this by growing our portfolio of offshore assets through this acquisition which will support our ability to sustain profit in the long term," he said.

MISC said this FSO will join its fleet of offshore floating facilities, which now comprises seven FSOs, six floating production, storage and offloading (FPSO) facilities, two mobile offshore production units (MOPUs) and one semi-submersible floating production system, bringing the total to 16 assets.

The group said this will further strengthen MISC's position as one of the leaders in the offshore segment, capable of operating in marginal and deepwater fields at various locations including Brazil, Vietnam, Thailand and Malaysia.

At 2:58pm, MISC shares were traded at RM5.91 each, down eight sen or 1.34%, giving it a market capitalisation of RM26.2 billion.