KUALA LUMPUR: Oil and gas services provider, Tanjung Offshore Bhd (Tanjung Offshore), is looking to venture into upstream oil fields in other Southeast Asian countries and Australia in efforts to diversify from relying solely on Petronas and Malaysia.
Tanjung Offshore would also pursue more downstream projects and support services around Petronas’s Refinery and Petrochemicals Integrated Development (RAPID) project, an industry source said.
This forms part of Tanjung Offshore’s strategy to diversify into related oil and gas businesses to widen its portfolio and increase profitability, he said.
Like many other O&G players, the current O&G downturn has impacted Tanjung Offshore and as a result, there were less projects amid higher competition which the source said has reduced margins and squeezed profits.
This was more so since TOP was largely seen by the market as an oil services provider, which was less profitable than mainstream O&G players.
This has prompted the company to take measures to address the issues brought on by the doldrums in the O&G business.
To this end, he said that Tanjung Offshore was creating more profitable O&G business segments.
It is also moving away from reliance on large offshore and maintenance contracts as these require a large headcount and investments in facilities.
This sector has limited scope as Petronas reduces spending and contract amounts in view of the steep decline in petroleum prices and the adverse effects on the industry globally, he said.
Tanjung Offshore would pursue more downstream projects and support services in and around the multi-billion Petronas’s RAPID project, the source said.
The company would be adding new lines of non-O&G business such as supplementing offshore services with new business segments that would bring some excitement to Tanjung Offshore’s shares and attract new investors.
The source said that a new business area which Tanjung Offshore was exploring was the construction, development and maintenance of buildings.
This is synergistic with Tanjung Offshore’s assets in hand which are fabrication facility in Johor, maintenance factory lots in Kemaman and an eight-storey commercial office building in Birmingham.
“Because of this fresh focus on non O&G business, a rebranding exercise may be in the offing for Tanjung Offshore,” he said.
— Bernama