Affin Research maintains Overweight on oil and gas

KUALA LUMPUR: Affin Research has maintained its Overweight on the oil and gas (O&G) sector on the massive US$5.2bil North Malay basin project, which is one of the largest upstream O&G projects in Malaysia.
In a note on Wednesday, Affin named SapuraKencana and Alam Maritim as its top picks.
Affin said the strong O&G newsflow reaffirms our view that Malaysia’s O&G sector is still bouyant with multiple major O&G projects under various pre-development stages.
“We expect higher contract awards and/or stronger newsflow in 4Q13/1H14 to further re-rate the share prices of O&G companies,” it said.
Affin said Hess has opened the tender for a turnkey contract to provide offshore facilities for the first development phase of the North Malay basin gas development near the Malaysia-Thailand Joint Development Area (MTJDA).
“Accordingly, Hess has prequalified three consortia to participate in a tender running through May 2014 for the engineering, procurement, construction, installation and commissioning (EPCIC) contract tied to a central processing platform (CPP) plus a wellhead structure at Bergading field in the North Malay basin.
“Importantly, the winning consortium will be required to carry out the fabrication of the wellhead platform locally to meet the local content requirements,” it said.
Affin said there are three bidding consortiums for the tender, the first being Samsung Heavy Industries partnering with SapuraKencana and Ranhill Worley; Hyundai Heavy Industries joining force with KKB and Aker Solutions; and McDemott teaming up with TH Heavy Engineering.
“Clearly, the Malaysian yard players will take on a supporting role to their bigger partners, Samsung, Hyundai and McDemott,” it said.
Affin added first gas is targeted at the end of 2016, suggesting the offshore production structure will have to be loaded out from the winning yard by around mid-2016 for offshore installation.

 dayang