Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (May 17): UMW Oil & Gas Corp Bhd (UMWOG) said it is tendering for 22 contracts this year, worth US$628 million (RM2.52 billion), comprising domestic and international jobs in Asia and the Middle East.

UMWOG president Rohaizad Darus said 48% of the tenders are for domestic jobs, while the balance 52% consist of international jobs. Two of the international contracts it is tendering for are located in the Middle East, while three are located in Vietnam.

"While the fourth quarter of last year was very bad, the first quarter we are seeing more tendering process coming up from the region. Currently we are bidding for 22 tenders. We hope that some will materialise and improve our position.

"In Vietnam, we are tendering for three contracts, and two more in the Middle East. We believe there will be more tenders coming out of the Middle East, and we have already registered with Abu Dhabi National Oil Co. There will be more rig demand in Abu Dhabi, Saudi Arabia and Kuwait," Rohaizad told the press today.

The group's orderbook is valued at approximately US$600 million.

Going forward, he said the group will continue to focus on improving its efficiencies, while also reducing costs, amid the current challenging oil and gas (O&G) environment.

He noted that the group has reduced RM18 million in costs in the first quarter of 2016 (1QFY16), after taking rationalising steps including the reduction in its workforce, renegotiations with its vendors and a reduction in inventory and capital costs.

Currently, UMWOG's workforce stands at 736 employees, after letting go 300 contractors. Rohaizad indicated the group will be looking to further shrink its workforce.

"We are going to try to reduce our workforce by a little bit more, but the focus will be more on the contractors, as we do not want to touch the permanent staff as much as possible. So those working under contract, when the contract expires, we don't renew them," he said, adding that contractors usually make up 30% of its workforce.

Asked if the group would return to profitability by the end of this financial year, Rohaizad said it is still too early to tell amid the headwinds faced by the industry, as oil prices remain low.

"It's very difficult to specify [as to] when we will return to the black. I do believe that it is a challenging year, unless the oil price makes a recovery. Looking at the current situation, it's about US$49 per barrel, and the most it can go is maybe about US$60 per barrel. At that level, it is challenging to return to profitability.

"If we get five more contracts, we'll be in the black. But whether we get them or not is a different story. If we don't, then it will be challenging," he said.

      Print
      Text Size
      Share