Yinson Production favours leasing as FPSO clients explore turnkey contracts
CEO Flemming Guiducci Grønnegaard said any expansion into turnkey work would depend on clients allowing a similar approach to project execution.
Yinson Production Ltd (YPL) remains committed to leasing and operating floating assets despite growing interest among oil majors in turnkey arrangements, group CEO Flemming Guiducci Grønnegaard said at a media briefing.
Grønnegaard said the two structures involved broadly similar project execution, but differences in how clients approached contracts could make some projects unsuitable for YPL. He said leasing aligned the interests of contractors and clients, while the company sought continuing relationships rather than simply delivering vessels.
Clients for floating production, storage and offloading (FPSO) vessels are considering turnkey projects as accounting changes require lease liabilities to be recognised, removing the previous off-balance-sheet benefit. Direct ownership also lowers long-term costs relative to leasing, creating opportunities for shipyards to compete directly.
YPL, owned by Yinson Holdings Bhd, nevertheless expects demand to remain strong because relatively few companies consistently take on new FPSO projects. Grønnegaard said any increase in turnkey activity would involve clients that permitted an execution approach similar to YPL’s existing practices.
For 1HFY2027, ended July 31, Yinson’s offshore production segment recorded results after finance costs of RM438 million, down 2.88% from RM451 million. Net revenue declined 16.7% to RM2.07 billion from RM2.49 billion.
The company’s fleet comprises 11 floating assets, with five wholly-owned.
