Yinson Annual Report 2019

FPSO Adoon We are very pleased to report that FPSOAdoon achieved 100% uptime throughout 2018, a perfect streak which has remained unbroken since Q2 2015. In fact, since FPSOAdoon commenced operations in 2006, the vessel has clocked an outstanding average uptime record of 99.96%. On 17 April 2019, the charter of FPSOAdoon by Addax Petroleum Development (Nigeria) Limited was extended on an interim basis up to 16 May 2019 based on the existing terms and conditions. This follows an earlier interim extension to 16 April 2019 announced on 23 November 2018, and prior to that, the first interim extension to 16 January 2019 was announced on 22 October 2018. This is the third interim extension which allows more negotiation time for both parties to finalise a further substantive extension of this charter. The original charter commenced on 17 October 2006 for a firm period of eight years with the option to renew for up to eight years. The firm period expired on 16 October 2014 and was first extended for a year to 16 October 2015, and thereafter for another three years to 16 October 2018. The Group is optimistic for the charter to be extended as Yinson’s performance has been pleasing, and the production from the oil field remains strong. FPSO PTSC Lam Son Reflecting back on the series of events affecting FPSO PTSC Lam Son (“FPSO Lam Son”) in Vietnam in FYE 2019, Yinson’s business strategy of putting in place strong contracting models for payments in the event of termination proved once again to be sound. In a situation not dissimilar to FPSO Allan, FPSO Lam Son’s charter was terminated on 30 June 2017 after three years of deployment at Lam Son Field, due to the field’s joint operators’ decision to discontinue their joint operations. FPSO Lam Son is currently free from financing encumbrances after the early termination payment for the project loan settlement was received and applied. Immediately on 1 July 2017, FPSO Lam Son was rehired by PetroVietnam Technical Services Corporation (“PTSC”) under the new field operator, PetroVietnam Exploration Production Corporation Ltd. (“PVEP”) for the continuation of petroleum operations within the Lam Son Field on an interim basis until 31 December 2018. On 28 December 2018, FPSO Lam Son’s tenure was further extended to 30 June 2019. This positive outcome is a testament to the development of robust contractual terms and also our commitment to practicing disciplined business and financial management. FSO PTSC Bien Dong 01 FSO PTSC Bien Dong 01 (“FSO Bien Dong”) recorded a 100% uptime record for yet another year in 2018. There were no material matters arising during the period in review except for a lower scheduled charter rate, resulting in lower contributions to Yinson. PTSC Ca Rong Do Ltd On 25March 2018, PTSC Ca Rong Do Ltd (“PTSC CRD”) received a notice under the Bareboat Charter Contract for the supply, operation and maintenance of an FPSO facility for Ca Rong Do Field Development – Block 07/03 Offshore Vietnam, to notify of a force majeure event where Charterer, Talisman Vietnam07/03 B.V., has been directed not to carry out the scheduled work programme for the Ca Rong Do project. PTSC CRD is a joint venture company owned by Yinson Clover Ltd and PTSC, holding a 49% and a 51% stake respectively. Yinson has taken all precautionary actions pertaining to the alleged force majeure event and will continue to monitor the situation closely. For the time being, the Group is upbeat on being compensated for the cost incurred during the initial Engineering, Procurement and Construction stage and mitigating works for the said project under agreed contract arrangements. While awaiting a resolution to the event, we effectively deployed resources to secure and bid for projects elsewhere. Management Discussion and Analysis Yinson Holdings Berhad ANNUAL REPORT 2019 34