Yinson set to gain from FPSO upswing

PETALING JAYA: Yinson Holdings Bhd is expected to be a key beneficiary of the floating production, storage and offloading (FPSO) vessel macro upcycle, driven by rising deepwater and ultra-deepwater oil production, with industry projections pointing to 64 FPSO awards between 2025 and 2030.

Maybank Investment Bank Research (Maybank IB) said it sees bright spots in the global FPSO market as Rystad Energy estimates that deepwater (125m to 1,500m) and ultra-deepwater (more than 1,500m) will spearhead offshore liquids production growth at an estimated compound annual growth rate of 2.2% and 8% each from 2024 to 2030.

“Rystad also projects a total of 64 FPSO awards from 2025 to 2030, averaging 10 to 11 jobs per year,” the research house said in a report yesterday.

Maybank IB noted that Yinson’s “greenest” FPSO Agogo is set to sail three months earlier than expected, in early March 2025.

It was initially slated for sail away sometime in June 2025, before targeted hook-up and first-oil in the fourth quarter of 2025 (4Q25).

“We believe that this is testimony of its strong project management and execution capabilities.

“With early delivery, we estimate Yinson could lock in decent cost savings from the project due to lower project man-hours, and reduced construction/docked days in Cosco’s shipyard.

“Additionally, with early delivery and first oil, Yinson will be eligible for an undisclosed bonus payment,” the research house said.

Maybank IB said with the early delivery, the targeted first oil in Angola should also be brought forward to 3Q25.

“Yinson’s FPSO Agogo will be deployed for Azule Energy, which is a joint venture between BP plc and Eni SpA Agogo and will contribute to increasing production in Block 15/06, with an expected production capacity of 120,000 barrels per day,” the research house said.

Additionally, the FPSO Agogo is recognised as the “greenest” FPSO ever constructed.

Furthermore, Maybank IB said FPSO Agogo is designed to feature a full suite of carbon emission reduction technologies and stands at the forefront as one of the most environmentally advanced vessels in operation.

Meanwhile, Maybank IB said based on its ground checks, Yinson may be prospective bidders in the upcoming few conversion projects like a replacement for FSO Unity (offshore Nigeria, within the Nigerian Exclusive Economic Zone) for Total Energies; FPSO for Baleine Phase 3 (offshore of Ivory Coast) for Eni; and a replacement for FPSO Kikeh (offshore Sabah, 120km off Labuan) for PTT Exploration and Production Public Company Ltd.

“We believe Yinson is well positioned to win future projects and could be a preferred choice for the bids, given its proven track record.

“We do not expect any equity fundraising should it win any of these jobs,” the research house added.

Maybank IB makes no changes to its financial year 2025 (FY25) to FY27 earnings forecasts for Yinson.

The research house has a “buy” call on Yinson with a target price of RM4.78.

“Our forecasts assume an order book of about US$20bil.

“We like Yinson for its strong and proven track record, prospects and environmental, social and governance initiatives,” Maybank IB said.

Yinson closed 0.45% up to RM2.25 yesterday.