KUALA LUMPUR (June 2): Swedish oil and gas material manufacturer Sandvik Materials Technology AB, which is part of Sandvik AB, will continue engaging with Petroliam Nasional Bhd (Petronas) to look for future projects even though the latter has announced that it would be cutting down its capital expenditure.

Its subsidiary, Sandvik South East Asia Pte Ltd (Asia Pacific) oil and gas regional sales manager Benno Wagner told reporters today that though it worked with Petronas on four projects here, regular discussions were ongoing with the latter as it was a major player in this region.

“We currently work on four projects with Petronas, in which we supply corrosion resistant super-duplex stainless steel tubing, umbilical tubing and oil country tubular goods (OCTG).

“Our discussions include showcases of our latest products, including the hyper-duplex umbilical tubing SAF3207 that are used for drilling in water depths more than 3,000 metres and withstand pressures of 20,000 PSI (pounds per square inch),” he said on the sidelines of the Oil and Gas Asia 2015 event.

Sandvik Southeast Asia has worked in more than 100 projects with Petronas globally and currently supplies parts to its Bergading natural gas project in the North Malay basin, South China Sea, and off Sabah projects comprising Block H liquefied floating natural gas project, Kamunsu East, part of the Kebabangan cluster project, and Kikeh oil field.

Wagner added that while this year has been challenging for the industry due to the drop in crude oil price, Sandvik was able to sustain the downturn because its contracts commenced before the slump in October last year.

“We could become affected after 2016 if conditions continue as is next year. But for now, we cannot say how bad the impact would be for us next year because we cannot predict oil prices,” he said.

He added that corrosion of tubing materials in seas here was one of Sandvik’s main challenges in this region, but was keen on overcoming the problem for its customers that wanted to move into deeper waters.

This was a result of reduced stock in shallow waters that has spurred oil players to seek production at lower depths, he said, adding that Sandvik’s customers in West Australia would be utilising its SAF3207 tubing next year.

“As subsea oil and gas productions move to deeper wells, operations at higher pressures and in more adverse conditions are required. However, Petronas has not announced any plans of exploring deeper offshore sites.

“Nevertheless, we want to be ready when they decide to make that move because then we can offer them our products,” he said.