Oil and gas sector sees RM1.6 bln jobs flow

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KUCHING: With the listing of Malaysian Marine and Heavy Engineering Bhd (MMHE) last week, the oil and gas (O&G) sector is set to gather momentum with some RM1.6 billion of jobs awarded from September into October.

WAITING FOR TENDERS: Ching highlights that many big caps were anticipating the tender of major fabrication jobs for Malikai’s deepwater development as well as the Tapis Redevelopment project. — Photo from www.nzog.com

“Chunkier contracts includes SapuraCrest Petroleum Bhd’s (SapuraCrest) rig renewals valued at RM420 million and also UMW Holding Bhd’s contract extension for Naga 1 at RM773 million,” revealed ECM Libra Capital Sdn Bhd (ECM Libra) head analyst Bernard Ching.

“According to our tabulation, the industry has so far seen RM8.3 billion jobs this year, a definite step ahead compared with the RM7 billion total seen over 2009.”

To note, Ching highlighted that many big caps were in anticipation of the tender of major fabrication jobs for Malikai’s deepwater development as well as the Tapis Redevelopment project.

Besides that, there were also talks of Dayang Enterprise Holdings Bhd (Dayang) being very close to securing a major topside maintenance job in addition to Petroliam Nasional Bhd’s (Petronas) re-gasification project potentially seeing contract awards by year-end.

“The Petronas re-gasification project might potentially be awarded to MMHE for conversion and MISC to receive vessel supply jobs. For now, it appears that they are going for a floating LNG (liquefied natural gas) coupled with onshore re-gas terminal. The budget will be maintained at RM3 billion,” Ching said.

AmResearch Sdn Bhd’s (AmResearch) oil and gas analyst noted that there were three consortiums which were vying for a US$250 million (RM778 million) turnkey project from Petronas in the Sepat marginal oil field, 130 kilometres off Terengganu.

“The three consortiums comprised of MMHE with France-based Technip SA, Kencana Petroleum Bhd (Kencana) with UK-based Petrofac Ltd and Australia-based Roc Oil Company Ltd with Griffin Energy Ltd,” he said.

“The job scope involves the use of a floating storage and offloading (FSO) vessel, jack-up production unit or floating production storage and offloading (FPSO) unit with a wellhead platform.

“Besides Sepat, we understand that there are other marginal oil fields, around 80,000 to 100,000 fields that may be under review as the Petronas data vault has been open since last week to potential operators such as Newfield, Salamander and Talisman,” he added.

Meanwhile, an analyst from RHB Research Capital Sdn Bhd (RHB Research) opined that ‘hot money’ inflows into emerging markets and the strengthened ringgit could be potential short-term drivers to commodity prices including crude oil.

“During the International Energy Agency’s senior oil demand analyst, Eduardo Lopez commented in a downstream oil conference in Singapore that investors could divert cheap US cash into commodities, triggering a rise in raw material prices.

“While this could eventually stoke inflation, we foresee that the rising crude oil prices would provide some near-term support to the trading interest of the sector and potentially sustain the upward momentum in O&G share prices,” an RHB Research analyst said.