Scomi targets US$2b worth of O&G tender for FY16

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KUALA LUMPUR (Sept 8): Scomi Group Bhd is targeting to tender US$2 billion worth of oil and gas (O&G) jobs for financial year ending March 31, 2016 (FY16), in order 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's chief operating officer Kanesan Veluppillai told a press conference, after the group's annual general meeting today.

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

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

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

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

Moving forward, he foresees the O&G industry to continue being challenging for FY16.

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

Scomi Group's shares traded unchanged at 16.5 sen today, giving it a market capitalisation of RM248.67 million.

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