Scomi Group to tender US$1b oil and gas contracts next year (7158)

KUALA LUMPUR: Scomi Group Bhd expects to tender about US$1bil (RM3.19bil) in oil and gas services contracts within the next year.
Group chief executive officer Shah Hakim Zain
said the projection was in line with a huge growth expected in Asean's
oil and gas services industry. “Year-on-year, the capital expenditure
for Malaysia is expected to grow by 16%, while Indonesia is expected to
grow by 25%. Thailand and Myanmar on the other hand are expected to
grow by 27% each.”
In the previous quarter, Scomi Group has
submitted some US$400mil (RM1.28bil) for the bidding of drilling
services contracts in the oil and gas industry. This amount represents
four contracts coming from Indonesia, Thailand and Myanmar. “There has
been an increase in amount of drilling activities in the market and we
hope to benefit from this,” Shah Hakim said.
He expects the announcement of the awards to be announced in the third quarter of this year.
Scomi Group's orderbook currently stands at RM1.276bil.
In
February, the group announced it would undertake a corporate
restructuring, which would see its businesses and those of associate
company Scomi Marine Bhd merged under a new, full-fledge integrated oil and gas marine and drilling services provider.
Upon
completion of the restructuring, Scomi Group will own a stake of
between 58% and 68% in Scomi Marine from 42.75% currently. Scomi Marine
will become a subsidiary of the group.
“By merging, we would be
in a better position to compete with three main competitors, namely
Schlumberger, Halliburton, and Baker Hughes.
“We believe the
merger of the two businesses will provide a platform for us to grow in
the region and contribute positively for the performance of the group
in terms of new contracts and new efficiencies,” Shah Hakim said.
The
proceeds from the disposal will be used for the capital repayment in
terms of a cash distribution of RM135.61mil, or 18.5 sen for every
existing ordinary share of RM1 each in Scomi Marine.
The
business in oilfields will then be split into the western and eastern
hemisphere. The eastern hemisphere business will then be injected into
Scomi Marine.
The last step of the restructuring exercise will
see the swapping of a portion of Scomi Marine shares to Scomi Group's
shareholders, which will increase Scomi Group's stake in Scomi Marine.
The restructuring is expected to be completed in November this year.
Shah
Hakim said: “Our strategy moving forward from the restructuring is to
focus our efforts in the eastern hemisphere, and to push the sale of
products and services into existing markets and to secure more
contracts. Also, we will introduce new related services in both the
oilfield industry and public transport industry.”
Currently, in
oilfield services, Scomi Group provided drilling fluid services and
drilling waste management, he said. “We have added completion of
fluids, completion systems, and provision of drilling tools. These are
similar services provided by our competitors.”