KUALA LUMPUR (Nov 27): Carimin Petroleum Bhd expects to resume expansion works on its minor fabrication yard in Terengganu early next year, after being named as one of the winners of Petronas' five-year maintenance, construction and modification (MCM) services contract in October.

"Our existing yard is enough to cover the minimum requirement of the [MCM] contract," said managing director Mokhtar Hashim. "[But] we are bullish there will be a lot of works coming in under this scope."

"As such, we have revisited the requirements of these yards. We want to have more facilities, now is the right time to invest," Mokhtar told reporters at the sidelines of the group's annual general meeting.

The group allocated RM12 million from its RM66.8 million initial public offering (IPO) in 2014 to upgrade its 78,448 sq ft fabrication yard in Telok Kalong, Kemaman, Terengganu.

However, after spending just under RM1 million, the group deferred purchase of equipment and setup of on-site facilities until February this year on grounds that its existing facilities were sufficient to cater to contract requirements at the time.

Mokhtar pointed out that work scopes under the MCM contract is wider, as it is for existing facilities, unlike the hook-up and commissioning (HUC) greenfield contracts that Carimin is traditionally involved in.

"Like it or not, they (Petronas) will still have to ensure the integrity of these existing facilities are maintained. During the downturn, Petronas did cut down both capital and operational expenditures but under this segment, they cannot afford to do that," he said.

"We feel confident… The indication given to us is that more projects will come up with the [MCM] contract," he added.

For its first quarter ended Sept 30, 2017, Carimin booked RM277,000 in losses, against a net profit of RM1.65 million a year ago, dragged by lower revenue from manpower services, as well as HUC business segments. Revenue declined 24.69% to RM24.73 million from RM32.85 million previously.

Despite the loss, Mokhtar shared optimism on the prospects of the oil and gas sector. This came with Carimin's diversification from being a HUC and topside major maintenance contractor to offer engineering, procurement, construction, installation and commissioning (EPCIC) services beginning this year.

"We are very optimistic going forward in 2018," said Mokhtar. "There's more assurance in our diversification path since we've already won our first ever EPCIC contract with ROC Oil (Sarawak) Sdn Bhd in August this year."