(Ecofin Agency) - Malaysia-based FPSO provider, Bumi Armada says it has suspended the operations and maintenance contracts signed with Erin Petroleum Nigeria Limited for the Armada Perdana FPSO operating at the Oyo oil field in Nigeria.

According to the company, the decision was due to Erin’s failure to pay for the bareboat charter and other irregular payments on the contract.

Bumi explained that its subsidiaries, Bumi Armada (Singapore) Pte Ltd (BASPL) and Armada Oyo Limited (AOL) had issued notices of overdue payment and letters of demand for the immediate payment of the outstanding amount but Erin has not respond till date. Therefore its two subsidiaries are suspending their obligations under the contract excluding the critical maintenance and other activities. This is to mitigate occupational health and safety, and environment risk.

Oyo deepwater oilfield is located 75km offshore Nigeria in OML blocks 120 and 121. Its oil resources lie at a water depth of 410m. The FPSO Armada Perdana which has a production capacity of 40,000 bopd and a storage capacity of 1.1 million barrels was deployed to work at the Oyo field since 2008 while production on the field began in December 2009.

Anita Fatunji