FPSO News Sepat FPSO Project Enters Critical Bidding Stage Amid Lukewarm Response

A major new FPSO (Floating Production Storage and Offloading) project has entered the spotlight in the Malaysian offshore energy market—the Sepat FPSO lease and operation contract. While the project was expected to attract enthusiastic bids from local FPSO contractors, industry insiders report that actual participation has fallen short of expectations, revealing an uneven competitive landscape.

According to Upstream, the Sepat FPSO project will adopt a “lease and operate” model with a firm 15-year contract and an optional annual renewal for up to 8 additional years. The project is exclusively open to Malaysian-based contractors, with the objective of stimulating the local offshore engineering industry and enhancing the nation’s independent energy asset operations.

Hebei Haihao Group

At the project’s announcement, it garnered widespread attention among Malaysian FPSO players and was viewed as a “must-win” opportunity. However, as the bidding phase progressed, the number of companies willing and able to submit a final offer turned out to be significantly lower than anticipated. The market sentiment has shifted toward a “wait-and-see” attitude, with more observers than active participants.

Why the Hesitation?

Despite the project’s seemingly attractive terms, several challenges have surfaced:

Limited Local Capacity: Malaysia has only a handful of FPSO companies with the full range of capabilities—design, financing, construction, and operations—required to deliver such a large-scale project.

Financial Constraints: With high financing costs and long return-on-investment periods, some interested companies have struggled to secure sufficient funding and eventually opted out.

FPSO project

Who’s Still in the Game?

Industry sources indicate that several local FPSO players are still preparing to submit their final bids. Among them, Yinson and MISC are widely seen as front-runners:

Yinson has been aggressively expanding its presence in international markets such as Brazil and Africa.

MISC, on the other hand, holds a strategic advantage in leveraging local resources and networks.

There is also speculation that smaller local firms may join forces with international technology or financial partners to form bidding consortiums, using this opportunity as a platform to “go global with support.”

The Sepat FPSO project, while designed to strengthen Malaysia’s offshore oil and gas capabilities, has revealed the gaps and growing pains of the domestic FPSO ecosystem. As the project moves into the final bidding stage, all eyes are on whether local companies will rise to the occasion or if more collaborative, cross-border models will pave the way forward.

Haihao Group will continue to monitor and support developments in the global FPSO sector, providing high-quality piping products and engineering solutions tailored to the needs of offshore operators.