Petronas awards RM10bil jobs to 6 companies

by **Cals** Sun 17 Nov 2013, 21:11

Published: Saturday November 16, 2013 MYT 12:00:00 AM
Updated: Saturday November 16, 2013 MYT 7:15:18 AM
Petronas awards RM10bil jobs to 6 companies
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Massive: Petronas says the 13 work packages involve the hook- up and commissioning and maintenance services for offshore facilities over five years.
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) has awarded 13 work packages, involving hook-up and offshore platform maintenance contracts worth a combined RM10bil over five years, to six local companies.
The contract was one of Petronas’ largest service contracts currently in place, CIMB Research oil and gas (O&G) analyst Norziana Mohd Inon said.
In a statement yesterday, Petronas said the Pan Malaysia Integrated Hook-Up & Commissioning and Topside Major Maintenance Contract (Pan Malaysia Integrated HUC and TMM Contract) had been awarded to Kencana HL Sdn Bhd, Dayang Enterprise Sdn Bhd, Petra Resources Sdn Bhd, PBJV Sdn Bhd, Carimin Engineering Services Sdn Bhd and Sigur Ros Sdn Bhd from this year.
SapuraKencana Petroleum Bhd, the parent company of Kencana HL, bagged two packages worth a combined RM800mil. Works relating to the two contracts were already ongoing, Norziana said.
“We understand that 60% of the works require the provision of various offshore support vessels, which SapuraKencana sources mostly internally from its expansive fleet,” she said.
The O&G sector has been seeing a steady flow of contracts this year with the continued development of marginal fields and enhanced oil recovery projects as well as the HUC. Analysts said the latest contract awarded by Petronas reiterated the national oil company’s commitment towards spending an average of RM60bil per annum in the next few years to meet its RM300bil five-year capital expenditure (capex) plan.
“The contract awards support our view that the fourth quarter could be a very busy period for O&G service providers,” an analyst said.
The analyst added that the high capex from Petronas would charge up the local O&G sector.
However, analysts were not surprised by the choice of the companies, as they had been the frontrunners to clinch the contracts.
“We have already priced in this contract for most of the companies,” an analyst said.
Dayang’s share price has surged 130% year-to-date. The counter closed at RM5.46, up nine sen, yesterday. Petra Resources’ parent company Petra Energy Bhd’s share price added more than 47%, while SapuraKencana added 35% year-to-date.
Petronas said the contract involved the hook-up and commissioning and maintenance services for offshore facilities and included all the necessary services, such as manpower services, marine spread services, and tools and equipment required for the execution of the respective work scopes.
The national oil company said six contractors would be providing HUC and TMM services to nine Petronas production sharing contractors, namely, Petronas Carigali Sdn Bhd, Sarawak Shell Bhd & Sabah Shell Petroleum Co Ltd, ExxonMobil Exploration and Production Malaysia Inc, Murphy Sarawak Oil Co Ltd, Hess Oil andGas Sdn Bhd, Talisman (M) Ltd, Newfield Peninsula Malaysia Inc, and JX Nippon Oil & Gas Exploration (M) Ltd.
Petronas’ vice president of petroleum management Ramlan A. Malek said the award of this major contract was Petronas’ acknowledgment of the capability of local service providers, including bumiputra companies.
It added that it was committed to providing business opportunities to such companies, and that this Pan Malaysia initiative was one such example of its continuous efforts towards this in Malaysia’s upstream services industry.
“The Pan Malaysia Integrated HUC and TMM Contract is part of Petronas’ continuous efforts to further optimise project deliveries and offshore activities in terms of costs and schedule, while at the same time drive and support the growth of capabilities among Malaysian service contractors,” Petronas said.
“The long-term nature of the contract not only provides for better economies of scale for Petronas, but is also expected to encourage the respective service contractors to invest in additional assets and allow for better retention and development of an experienced workforce.”