Tanjung Offshore bags RM250m topside maintenance contract



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KUALA LUMPUR (June 9): Oil and gas service provider Tanjung Offshore Bhd has bagged a construction work request (CWR) contract worth RM250 million from Petronas Carigali Sdn Bhd.

The contract, via its wholly-owned subsidiary Tanjung Offshore Services Sdn Bhd, entails the provisioning of topside maintenance works for Petronas Carigali’s existing offshore and onshore facilities in Sarawak, for a period of two years, with a one-year extension option.

Tanjung Offshore chief executive officer Rahman Shamsudin said the group will benefit from the contract in the near term, as the cost for the maintenance works is little affected by global oil prices.

Tanjung Offshore had on June 5 announced that it will lodge official complaints to the Malaysian Anti-Corruption Commission (MACC) on the company’s purchase of a 49% equity interest in Gastec Gas Generators (M) Sdn Bhd in 2013 as well as the acquisition of a property in Birmingham, UK.

The complaint was made following a forensic audit on the company, as recommended by Ferrier Hodgson MH Sdn Bhd, which revealed shortcuts taken and a sequence of shortcomings, giving way to corporate weakness.

Besides the Gastec and Birmingham deals, the remaining four transactions that were the subject of the audit were: the aborted asset-injection that would result in a reverse takeover of Tanjung Offshore by Bourbon SA, a failed chromite in the Philippines involving RM6.2 million, Tanjung Offshore's investment of RM3.2 million into an Ethylene Propylene Diene Monomer (EPDM) project in China, and a CWR.

Year-to-date, Tanjung Offshore’s share price has appreciated 31.9%, outperforming the FBM KLCI which has declined 32.2% during the same period.

Tanjung Offshore (fundamental: 1.85; valuation: 0.9) shares closed unchanged at 47.5 sen today, giving a market capitalisation of RM180.05 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)