Thursday 28 Mar 2024
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KUALA LUMPUR: Scomi Group is targeting to tender for US$2 billion (RM8.66 billion) worth of oil and gas (O&G) jobs for financial year ending March 31, 2016 (FY16) to maintain its current RM1.4 billion order book.

“There are a lot of tenders in the market, it is just not in Malaysia, there are countries that are pushing up oil production,” Scomi Group chief operating officer Kanesan Veluppillai told reporters after the group's annual general meeting yesterday.

Up to July, he said Scomi Group's 65.65%-owned Scomi Energy Bhd, which houses the O&G business, had been awarded US$140 million, while there are US$800 million worth of jobs still pending for tender results.

In terms of bottom line, Kanesan declined to provide any guidance, but merely mentioned that Scomi Group has managed to achieve cost savings of US$5 million in FY15. He pledged it will continue its effort on cost management.

For the first quarter of FY16 (1QFY16), Scomi Group’s earnings fell by 14.18% on-year to RM9.73 million, from RM11.34 million; revenue also declined by 8.26% to RM379.89 million from RM414.12 million in 1QFY15.

On the Ophir marginal oilfield risk service contract (RSC), Kanesan said despite the current low crude oil prices, Scomi Group's risk in this project has been mitigated.

“Our capital is being guaranteed by Petronas (Petroliam Nasional Bhd), so even [if] oil price drops to US$10, we are still safe,” he said.

Kanesan added that Ophir will begin oil production by November next year.

The Ophir RSC project was awarded to Ophir Production Sdn Bhd, in which Scomi Energy holds a 30% stake through its wholly-owned unit Scomi D&P Sdn Bhd.

The remaining 70% stake is owned by Australia-listed O&G company Octanex NL (50%), and Vestigo Petroleum Sdn Bhd, which is wholly-owned by Petronas.

On Sept 1, Octanex issued a statement to announce that Petronas has approved the revised field development plan (FDP) for Ophir oilfield, which was drafted because of the drastic dip in oil prices.

Following the decline in oil price, Octanex said a cost optimisation work was undertaken with cost savings of about 30%, which the FDP will take advantage of, and result in a revised capital budget of US$90 million.

Scomi Group's shares traded unchanged at 16.5 sen yesterday, for a market capitalisation of RM248.67 million.

 

This article first appeared in digitaledge Daily, on September 9, 2015.

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