Dayang Enterprise Holdings Bhd and Petra Energy Bhd are seen as the frontrunners for Petroliam Nasional Bhd’s (Petronas) ongoing tender for the maintenance of its offshore platforms across Malaysia.
It is learnt that Petronas has solicited bids for the maintenance of its local offshore platforms on a five-year term. Analysts’ estimates indicate that the contracts could be worth at least RM1.2 billion comprising facilities in Peninsular Malaysia as well as Sabah and Sarawak.
The contract value for the Sabah and Sarawak portion is estimated at RM800 million.
OSK Research senior analyst Jason Yap said apart from its home-ground advantage, Sarawak-based Dayang’s acquisition of a 40% stake in Syarikat Borcos Shipping Sdn Bhd in September last year was expected to boost its chances of securing a slice of the Petronas jobs in Sabah and Sarawak.
This is by virtue of Dayang having additional infrastructures and vessels via the acquisition.
Petra Energy’s chances, according to Yap, are based on the fact that the company has experience working with Royal Dutch Shell plc, whose oil and gas projects are mostly based in Sabah and Sarawak.
“Both Dayang and Petra Energy have the potential of securing the contract in Peninsular Malaysia,” Yap told The Edge Financial Daily. Bids for
Petronas’ offshore platform maintenance contracts are solicited every five years and the successful bidder will undertake the job on exclusive terms.
Dayang is the incumbent maintenance services provider for Petronas’ Sabah and Sarawak operations while Vastalux Energy Bhd services the national oil company’s offshore platforms in Peninsular Malaysia.
Of the estimated 60 players in the industry, it is said that only a handful of oil and gas support services providers are technically qualified for the Petronas job. These handful of companies include SapuraCrest Petroleum Bhd and Petra Energy Bhd, apart from Dayang and Vastalux.
The tender for the Petronas project is expected to be closed this month, and the national oil company is anticipated to name the successful bidders within six to nine months.
Meanwhile, the market is also anticipating a new hook-up and commissioning umbrella contract by Petronas and its production-sharing contract partners by the end of this year. The contract has an initial estimated worth of RM2 billion.
Only pre-qualified contractors, by virtue of their technical expertise, are allowed to bid for the contract. The existing contract, which expires this year, had five pre-qualified contractors, namely Dayang, Kencana Petroleum Bhd, Petra Energy, Shapadu Energy & Engineering Sdn Bhd, and Vastalux.
Meanwhile, HwangDBS Vickers Research said Dayang stood a good chance of clinching the Sabah and Sarawak portion of the offshore platform maintenance job considering that it had a long track record in servicing oil and gas platforms there since 1991.
“Dayang is also among the few maintenance services providers that own workboats, assets which are required for the job. We believe the market has not priced in the positives from Petronas’ increased investment commitment in local E&P (exploration & production) ,” HwangDBS Vickers wrote in a note to clients.
Newly appointed Petronas CEO Datuk Shamsul Azhar Abbas recently said the state-owned oil company would pump in more money to develop local hydrocarbon reserves and reduce costly exploration activities abroad.
He reportedly said that Petronas needed to relook its substantial investments for oversees exploration jobs as these initiatives had seen a low success rate.
Shamsul said Petronas should undertake more exploration at home where the company could scout for new fields in deep waters and extract more hydrocarbon resources from existing fields.
The government has identified the oil and gas sector as one of the 12 national key economic areas under the 10th Malaysia Plan deemed to have the potential to generate high income for the country.
This article appeared in The Edge Financial Daily, June 14, 2010.
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