O&G players see uptake in crude oil futures among corporate updates

KUCHING: Good news continues to permeate throughout the oil and gas industry as crude oil futures showed a strong performance over the past week on the back of some new jobs being secured by Malaysian players.

NEW JOBS: KNM announces the receipt of five jobs worth RM288 million which will boost sentiments on the stock and shows a recovering demand for process equipment, specifically in the neutral gas market.

“Crude oil futures were strong week-on-week, rising some 5.3 per cent. We see this as a good sign for the industry, being predominantly driven by a weakening in the US dollar,” affirmed an analyst from ECM Libra Capital Sdn Bhd (ECM Libra) when contacted by the Borneo Post recently.

AmResearch Sdn Bhd (AmResearch) in a research report yesterday backed the view held by ECM Libra, remaining positive on the sector with emerging signs of new domestic-centric jobs.

These jobs included some RM4 billion in fabrication contracts for Malaysia’s shallow fields to be awarded later in the second half of the year along with the RM3 billion Petronas liquefied natural gas (LNG) re-gasification plant in Melaka.

This was on the back of new maintenance and hook-up commissioning services for existing offshore platforms worth about RM3 billion, ExxonMobil’s enhanced oil recovery investments worth over RM7 billion for existing fields, and the revival of the RM2 billion Sabah oil and gas terminal in Kimanis.

“Back in Malaysia, share prices of O&G companies were mostly in the positive territory with Petra Perdana Bhd among the biggest gainers with a 4.8 per cent uptick, KNM Group Bhd (KNM) up three per cent on their contract wins and Dayang Enterprise Holdings Bhd (Dayang) also up 2.6 per cent,” said the analyst.

Recently, KNM announced the receipt of five jobs worth RM288 million from Venezuela, Brazil, the US, Turkmenistan and Australia. These jobs would boost sentiments on the stock and showed a recovering demand for process equipment, specifically in the neutral gas market.

Kencana Petroleum Bhd (Kencana) secured a RM201 million job from Newfield Exploration Company (Newfield) for the procurement and construction of wellhead platform topside, central processing platform topside, living quarters and bridge for PM239 East Piatu Development Project with the job earnings accretive into 2012.

Dialog Group Bhd as an expert in tank farm construction might have an involvement in this project.

In light of the recent Deepwater Horizon disaster in the Gulf of Mexico, Petroliam Nasional Bhd (Petronas) has taken emergency measures to shut down the Belumut to Tinggi pipeline after an oil sheen was detected on the surface of the surrounding sea waters.

Its production-sharing contractor (PSC) Newfield was now in the process of investigating the situation of a potential subsea pipe leak.

In other corporate news, SapuraCrest Petroleum Bhd (SapuraCrest) said it was bidding for some RM3 billion in jobs, RM1.4 billion of which were local and the rest in Vietnam, Indonesia and India.

Oil and gas services provider Vastalux Energy Bhd managed to secure a special licence from Petronas to participate in the hook up and commissioning of the Dulang field compressed gas capacity enhancement project. Dayang was also participating in this project.

On downstream news, there was a report that Middle East investors might spend some RM1 billion at Penang Port to construct a tank farm. Malaysia currently has a shortage in storage and ECM Libra viewed some potential for the job to go through.

ECM Libra concluded by affirming that the time was still ripe for entry into stocks such as SapuraCrest, Wah Seong and Dayang Enterprise.


by Ronnie Teo
Borneo Post