CIMB Research sees more upside for O&G sector

KUALA LUMPUR: CIMB Equities Research continues to have positive expectations for the oil & gas sector, and maintains its Overweight call.
“Our
top picks are SapuraKencana for big caps and Perisai for small caps.
For exposure to marginal field development, we recommend SapuraKencana
and Dialog,” it said on Thursday.
It quoted Upstream, an
international oil & gas newspaper, that Petronas is set to reveal
by year-end the winners of two further risk service contracts
(RSCs)that will cover the development of the Tembikai and Cenang
marginal fields.
“Meanwhile, several local companies are
believed to be in talks to participate in the Kapal, Banang and Meranti
(KBM) RSC with Thailand-based Coastal Energy,” the newspaper said.
CIMB
Research described this is a welcome development given that it has been
more than a year since Dialog (Outperform) won the second RSC.
So
far, three RSCs have been awarded, giving the opportunity for
SapuraKencana (Outperform) and Dialog to venture into exploration &
production.
With 22 more RSCs worth an estimated US$17.6bil to
US$22bil to be awarded, the marginal field development offers great
potential for local companies, CIMB Research said.