THHE hopes to bag RSC with foreign partner

THHE hopes to bag RSC with foreign partner
Business & Markets 2013
Written by Afiq Isa of theedgemalaysia.com
Tuesday, 04 June 2013 09:46


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KUALA LUMPUR: TH Heavy Engineering Bhd (THHE) is currently bidding for a slice of Petroliam Nasional Bhd’s (Petronas) lucrative risk service contracts (RSC) for the production of petroleum in marginal oil fields.

Speaking to reporters after the company EGM and AGM yesterday, THHE CEO Nor Badli Mohd Alias said the oil and gas services provider is bidding for the third licensing round by Petronas with an undisclosed foreign partner.

“The previous RSCs given out had a value of not less than RM500 million for one project. If we are successful, it will positively contribute to our business,” he said, adding that THHE’s current order book is valued at RM301 million while its tender book stood at RM2 billion.

According to a note by AmResearch Sdn Bhd, up to a dozen oil and gas players, mostly comprising small to medium services providers, are vying for the RSCs.

The research house said other Malaysian players in the running include Bumi Armada Bhd, DELEUM BHD [], Puncak Oil & Gas Sdn Bhd and UMW Oil & Gas Corp Sdn Bhd.

At the EGM, shareholders approved the company’s proposed joint venture (JV) with McDermott International Inc (MII) to provide engineering, procurement, CONSTRUCTION [], installation and commissioning (Epcic) works.

The move will see THHE selling its 30% equity stake in TH Heavy Fabricators Sdn Bhd in exchange for a 30% stake in Berlian McDermott Sdn Bhd, a subsidiary of MII.

Upon completion of the disposal and acquisition exercises, THHE and MII will set up new engineering and procurement companies as agreed for in the JV.


Nor Badli: If we are successful, it will positively contribute to our business.
“We will leverage on the combined expertise of THHE and McDermott to engineer, design and provide innovative solutions for the Epcic projects,” said Nor Badli.

On another matter, he said THHE’s link to tycoon Tan Sri Quek Leng Chan will prove to be mutually beneficial for both parties.

“We always try to incorporate substantial shareholders who can create value for us.

“Tan Sri Quek has got a broad international network in various aspects, along with considerable financial resources,” said Nor Badli.

THHE had announced on May 7 a private placement exercise to parties linked to Quek, who helms the Hong Leong group.

Under the terms of the placement, 92.79 million shares, or 10% of THHE’s share capital, were allocated to GuoLine Capital Ltd and Quek Kon Sean.

GuoLine, an indirect wholly owned subsidiary of Hong Leong Co (M) Bhd, will subscribe to 7% or 65 million shares with the rest going to Kon Sean, who is the youngest son of the tycoon.

Nor Badli added that Quek’s reputation will lend credence as THHE seeks to procure more oil and gas services contracts locally and internationally.

He cited Myanmar, India and the Middle East as possible overseas targets for the provision of oil and gas services. — By Afiq Isa


This article first appeared in The Edge Financial Daily, on June 4, 2013.