Stock Of The Week: Barakah Offshore

AN oil and gas stock which has got the market all excited since its debut on Nov 6 would be Barakah Offshore Petroleum Bhd. Not only has its stock price done well (it’s up 2.4 times to RM1.56 from its offer price of 65 sen), but it has also won a Petroliam Nasional Bhd (Petronas) contract less than two months after its listing.

While trading in Barakah remains suspended as at press time, the stock will likely see further action when trading reopens.

Yesterday, Petronas announced that it has recently awarded the Pan Malaysia Integrated Offshore Installation contract estimated at RM10bil to three companies, and one of them was PBJV Sdn Bhd, the wholly owned subsidiary of Barakah. Analysts estimate Barakah’s portion will be worth about RM1.5bil.

The contract, which was a competitive tender open to both local and international companies, involves the transportation and installation for offshore facilities.

Barakah told Bursa Malaysia PBJV group had received letters of awards from oil and gas production-sharing companies for the provision of transportation and installation of facilities for the year 2014 to 2016 under package A.

“The contract includes transportation and installation of facilities such as pipelines and related equipment for offshore oil and gas fields within Malaysia. The contract is for three years from December 2013 to December 2016 with a one-year extension option,” it said.

Prior to this, Barakah’s order book includes RM500mil in hook-up commissioning contracts. Barakah currently owns a 137m-length pipe-lay barge, the Kota Laksamana 101 (KL101), to undertake bigger and more challenging offshore pipeline activities. — By TEE LIN SAY, thestar.com.my

The comments above do not represent a recommendation to buy or sell.