O&G firms to enjoy sustained growth

The Malaysian oil & gas (O&G) industry will see an
action-packed 18 months ahead, with its service providers set to
continue enjoying sustained growth, says Maybank Investment Bank (IB)
Research.

Its
growth will be sustained with demand for equipment and services
increases in light of the rising activities in the sector, it said.

"Offshore
fabrication works will dominate the headlines as we estimate contracts
for offshore fabrication structures worth up to RM7 billion will be
announced over the next 18 months.

"A series of field
developments will also be rolled out this year. We have identified five
projects revolving around the rejuvenation/enhanced oil recovery (EOR),
early production system (EPS) and marginal field projects on risk
sharing contract (RSC) terms," Maybank IB said in a research note today.



A significant pick-up of activities in the offshore shallow water,
deepwater, rejuvenation and marginal field spaces is also expected.

This
will be in tandem with Petronas Bhd's commitment to spend about RM300
billion in capital expenditure over 2011 to 2015, averaging RM60
billion per annum to support its growth agenda, Maybank IB said.

The
research firm placed an 'overweight' call on the O&G sector with
SapuraKencana Petroleum Bhd, Bumi Armada Bhd, Malaysia Marine and Heavy
Engineering Bhd as top picks in the large cap sector.--BERNAMA