THE Malaysian oil and gas (O&G)
industry is expected to unleash huge growth opportunities for
related organisations especially in the exploration and development
of deepwater fields.
AmResearch said in a recent sector update that within six years from
the maiden discovery of the first deepwater field – Kikeh in 2002 –
Malaysia now had at least 26 deepwater fields.
“Kikeh and Gumusut-Kakap alone
account for almost 15% to 30% of Malaysia’s total oil reserves, and
is expected to increase current oil production by 38% or 250,000
barrels per day,” it said.
According to the report, the Kikeh
field’s estimated oil reserves was 400 million to 700 million
barrels of oil equivalent (boe) or about 7% to13% of the nation’s
oil reserves of 5.4 billion boe last year.
It said the second deepwater
development, the Gumusut-Kakap, was currently ongoing and would
increase current oil production by at least 20%.
The report said the development of
deepwater fields would soon broaden to six other fields – Malikai,
Kebabangan, Jangas, Ubah, Pisangan and Kamunsu thus boosting demand
for floating, production, storage and offloading (FPSO) units,
semi-submersible platforms, deepwater drilling rigs, anchor handling
tug and supply vessels as well as other offshore support vessels (OSVs).
The research house maintains an
overweight call on the O&G sector.
Ramunia Holdings Bhd is expected to
gain significantly after the confirmed reverse takeover (RTO) by
MISC Bhd scheduled for completion in the fourth quarter of the year.
Post the RTO, Ramunia will become
the largest and only deepwater offshore fabricator in Malaysia. The
enlarged group will have access to yard space totalling 260 acres
with 836 meters of shoreline.
“MMHE which has first right of
refusal for all Petroliam Nasional Bhd's (Petronas) deepwater
offshore structure requirement is running close to optimum
utilisation in its yard.
“Hence, additional yard space would
be required to undertake upcoming projects,” it said.
AmResearch said MMHE was also being
positioned by Petronas to be the leading deepwater engineering
services entity. MMHE has already fabricated two deepwater FPSOs and
was awarded a RM2bil contract to build a semi-submersible platform.
Another significant player in the
deepwater O&G industry is SapuraCrest Petroleum Bhd.
The group which focuses on
deepwater pipe laying work, is banking on its pipe laying vessel,
Sapura 3000 to win the contract for the Gumusut-Kakap project.
“We believe SapuraCrest is in the
running to secure a pipe laying contract worth RM1.5bil to RM2.0bil
for the Gumusut-Kakap deepwater development project.
“This will increase its existing
order book by 36% to 47% to RM5.7bil to 6.2bil from the current
“The sizeable contract will improve
Sapura 3000’s utilisation (especially for deepwater works) and would
boost the division’s margins going forward,” it said, adding that
deepwater pipe laying works had pre-tax margins of about 10% to 15%.
Besides Sapura 3000, the report
said, SapuraCrest's other strong O&G assets provided significant
leverage for the group to benefit from the robust offshore demand
and rising charter rates.
The group’s drilling rig, Teknik
Berkat, secured a new charter contract last April with rates 45%
higher than the previous contract.
“Its drilling division’s joint
venture with Seadrill is also expected to generate steady recurring
earnings of about RM61mil to RM84mil from the year ending Jan 31,
2009 to 2011 underpinned by secured charter contracts over the
period,” it said.
Dialog Group Bhd, a tankage
facilities and services provider, involved in the entire O&G value
chain should be reaping the short-term and long-term benefits of the
“We anticipate growing contribution
from its centralised tankage facility division due to mounting
requirement for tankage facilities in Johor as well as globally.
This will drive Dialog's future earnings.
“Insufficient tankage facilities in
Singapore to meet robust demand will work well for Dialog's joint
venture with MISC and Trafigura,” Amresearch said.
It expects at least five more tank
terminals to be erected on the Dialog-MISC JV's 40-acre leased land.
“Dialog's second tankage facility
in Port Tanjung Langsat, Johor will lift its 2009 to 2010 earnings
by 11% to 12% per annum,” it said.