Research firm positive on oil & gas sector

by **Cals** Thu 27 Mar 2014, 08:22

[size=33]Research firm positive on oil & gas sector[/size]

Posted on 27 March 2014 - 05:37am

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[size=14]PETALING JAYA: MIDF Research maintained its positive stance on the oil and gas (O&G) sector on continued high activity levels, as evidenced by various fund raising corporate exercises.

For the past six months, it said there have been a fair amount of corporate exercises undertaken by the listed O&G service providers.

The research firm said companies are building up their financial muscle in anticipation of new jobs being awarded to fund existing project operations, to acquire new businesses, to acquire additional assets and to restructure debts in order to meet certain listing requirements.

MIDF estimates that more than RM12 billion worth has been raised by the local listed O&G service providers, primarily via private placements, rights issue and initial public offerings.

"This is a good indication that sentiment is bullish and the capital market still has confidence in supporting the O&G service providers," it said in a note yesterday.

In the first quarter of 2014, it said more than RM3 billion worth of job awards has been announced on Bursa Malaysia, indicating sustained contract award activities, albeit at a slightly tapered pace.

MIDF said more than RM40 billion worth of contracts were awarded to the 30 Bursa Malaysia-listed O&G service providers in 2013.

The major contracts awarded were mostly for long term projects ranging from three to five years, it said, adding that these include hook-up and commissioning, large offshore structure fabrication works and floating, production, storage and offloading (FPSO) and transportation and installation jobs.

"As such, we strongly believe that operating level of most O&G service providers will remain elevated in 2014," it said.
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