AmResearch keeps ‘overweight’ on oil and gas sector after BN wins

Business & Markets 2013
Written by Charlotte Chong of the edgedaily.com
Monday, 06 May 2013 11:02
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KUALA LUMPUR (MAY 6): AmResearch maintained an ‘overweight’
rating on oil and gas sector with the anticipation of multiple flow
contracts this year after Barisan Nasional won a majority in Malaysia’s
13 general election yesterday.
AmResearch analyst Alex Goh said in a note today that the continuation
of a Barisan Nasional-led federal government was likely to result in a
faster pick-up in momentum for the rollout of projects in Malaysia, which
had seen in a lull in the past two months.
Also, the newsflow momentum would be supported by contract awards
from the RM60 billion RAPID project in Pengerang and tank terminal
projects in Southern Johor, with the gas cluster projects off Sabah and
Sarawak, he said.
The projects that have been delayed are the RM8 billion to RM10 billion Pan-Malaysian hook-up, CONSTRUCTION [] and
commission (HUCC) umbrella contract as well as several massive fabrication contracts in Terengganu and East Malaysia.
“The award of the HUCC contracts, which were earlier expected in 4QFY12 and subsequently postponed to 1QFY13, now
appears to be delayed longer,” he said, adding that the front-runners and in the short-list of the tender are Dayang Enterprise
Holdings and Petra Energy.
“In our view, the surprise beneficiary from the HUCC contract could be Alam Maritim Resources, which is new compared to
Dayang and Petra Energy.”
He said that the contract could be less significant for SapuraKencana, given the scale of its already huge orderbook of RM18
billion.
“We expect the addition of Seadrill’s tender rig contracts to drive SapuraKencana’s earnings growth this year,” he said.