Thursday 28 Mar 2024
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THIS YEAR, the oil and gas sector went from being the most lucrative and exciting to one that investors shy away from.

The slide in crude oil prices, which had tumbled from as high as US$115 per barrel in July to a five-year low of US$60 per barrel on Dec 16, roiled financial markets and cast uncertainty over the planned capital expenditure of oil and gas companies.

Goldman Sachs has warned that almost US$1 trillion of spending on future oil projects is at risk following the sharp decline in crude oil prices.

Petroliam Nasional Bhd president and CEO Tan Sri Shamsul Azhar Abbas said in November that based on new price assumptions, the national oil company is looking to reduce its capital expenditure for next year by as much as 15% to 20%.

He also said companies should expect a drop in the number of jobs awarded and that the government should “tighten its belt” as its dividend may be lower this year.

Nevertheless, some oil and gas players were able to bulk up their order books early on to survive the downturn.

The following are a few of the sector’s key players in 2014. - by Madiha Fuad

NM_1046_Hassan-Assad-Basma

Hassan Assad Basma
CEO and executive director, Bumi Armada Bhd

After about a decade at the helm of Bumi Armada, Hassan’s resignation early this month during a delicate period for the oil and gas industry has created a vaccum that the company may find hard to fill.

Hassan’s resignation is effective from Jan 1, 2015.

Under his leadership, Bumi Armada rose to fifth place in the global floating production, storage and offloading league in terms of fleet size. Hassan’s contribution to the company’s growth is reflected in its expansion overseas, especially in Africa, since 2005.

Recently, Hassan has been selling his shares in Bumi Armada. He sold his entire direct interest of 2.74 million shares or a 0.05% stake at RM1.02 to RM1.03 on Dec 4, according to filings with Bursa Malaysia on Dec 5. The disposal was due to margin calls on loans that Hassan took to buy the shares.

Interestingly, a filing with Bursa shows that Hassan acquired 500,000 shares or a 0.009% stake on the open market on Dec 15.

Although he will continue to be engaged as a consultant by Bumi Armada until mid-2016, the market will be watching for who takes up the challenge of being the company’s new CEO in the current sluggish oil price environment.

Until then, Chan Chee Beng — a member of the board since 2003 and said to be a good friend of the company’s single largest shareholder, T Ananda Krishnan — will be the executive director and acting CEO. However, he does not fit the bill as his skills are in investment banking, financial management and accounting.

NM_1046_Tan-Sri-Shahril-Shamsuddin.

Tan Sri Shahril Shamsuddin
President and CEO, SapuraKencana Petroleum Bhd

SapuraKencana secured about RM12.3 billion worth of contracts this year — 74% located overseas and 26% locally.

On top of that, the group now has control of seven production sharing contracts (PSCs) after the acquisition of Newfields Malaysia and oilfields in Vietnam, and the award of Sabah PSCs.

Shahril has been instrumental in building SapuraKencana into the third largest global integrated oil and gas service provider. However, his net worth from his shareholding in the company has fallen to RM2.5 billion from RM4.5 billion in July, following the decline in its share price.

This is the first downturn for SapuraKencana since its establishment via a merger between SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd in 2012. All eyes are now on Shahril to see how he steers the group during these trying times.

NM_1046_Tan-Sri-Mokhzani-Mahathir

Tan Sri Mokhzani Mahathir
Non-executive vice-chairman,  SapuraKencana Petroleum Bhd

This year, Mokhzani was repeatedly in the limelight due to his market manoeuvres.

In February, he sold 190.3 million SapuraKencana shares at RM4.30 apiece or a total of RM818.3 million. It was a timely disposal as the stock had been trading near its all-time high of RM4.60.

He then relinquished all his executive roles in the company, which caught the market by surprise. Some even wondered if he was going to fully exit the company by year-end.

Mokhzani’s moves fuelled rumours of a strained relationship with his partner Shahril. However, it looks like the disposals were merely to book profit as Mokhzani is starting to buy back the shares in the current low oil price environment.

So far, he has acquired three million shares on the open market and market talk has it that he is looking to buy some more.

 

This article first appeared in The Edge Malaysia Weekly, on December 29, 2014 - January 04, 2015.

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