KUALA LUMPUR (Dec 16): Kenanga Investment Bank Bhd Research has maintained its "Neutral" call on the oil and gas sector, noting that it is positive on the Activity Outlook for 2020-2022 by Petronas and feels comforted that upstream activities would continue to stay elevated from the surge in 2019.

In a note today, the research house identified the big winners from Petronas' Activity Outlook. Among them are fabricators (e.g: Marine and Heavy Engineering Holdings Sdn Bhd and Sapura Energy Bhd), which will benefit from the surge in numbers of wellhead platforms (WHPs).

Based on the Activity Outlook, Kenanga Research said marine vessel providers (e.g: Perdana Petroleum Bhd, Alam Maritim Resources Bhd, Icon Offshore Bhd and Coastal Contracts Bhd) will benefit from the huge rise in demand for offshore support vessels (OSVs).

Kenanga Research also highlighted that offshore players (e.g: Dayang Enterprise Holdings Bhd and Carimin Petroleum Bhd) will continue to enjoy increased maintenance, construction and modification work orders.

"Meanwhile, Velesto Energy Bhd, [whose] rig fleet are currently fully chartered out, is expected to continue to enjoy high utilisation rates amidst sustained drilling rig demand," it said.

Most of the upstream value chains are expected to see approximately maintained activity levels as in 2019, with several of them anticipated to see a surge.

"More specifically, we identified that the biggest rise in activities would come from offshore fabrications, WHP, which almost saw a doubling in number of projects and marine vessels, which are expected to see a rise in demand for anchor handling tug and supply (AHTS), platform supply vessels (PSVs), straight supply vessels (SSVs) and other forms of support vessels.

"[And] maintenance, construction and modification, which [are] expected to see a peak in man-hours for 2020 despite a strong year in 2019," it added.

Meanwhile, most of the other value chains are expected to see maintained activity levels as in 2019, notably drilling — jack-up demand is expected to remain at approximately 16 rigs, hook-up and commissioning flattish at approximately 4.6m man-hours, and decommissioning — is expected to see a slight dip in number of wells for 2020, before a surge in 2021.