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Spots of optimism seen in offshore

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Sentiment at least, if not actual results seems to be improving in the offshore oil and gas industry with some companies in the beleaguered sector expressing some flickers of optimism.

Miclyn Express Offshore (MEO) in its recent H1 FY18 announcement noted that international oil companies (IOCs) and national oil companies (NOCs) will resume replenishing reserves gradually and that activity levels are still expected to improve in some regions, mainly in the brownfield and inspection, repair and maintenance (IMR) segments.

Major Malaysian fabricator Malaysia Marine and Heavy Engineering (MMHE) meanwhile was cited as saying by local media on the sidelines of its recent AGM that it expects more jobs that it can tender for to become available in the market.

"Signs do suggest that the industry is recovering slightly. From the tender activities perspective, we should see more of that as some of the oil majors have started to revalidate some of the tenders," md and ceo Wan Mashitah Wan Abdullah Sani was quoted as saying.

However ahead of these expected orders there was still a need to weather the current challenging conditions. MEO said it would weather the storm by remaining focussed on the more resilient shallow water production related activities, as well as maintaining current utilisation levels by leveraging strategic customer relationships while maintaining operational excellence and cost control.

In the most recent reporting period, MEO noted that repositioning of assets to the Middle East has helped utilisation but the market is still oversupplied and suffers from low rates, especially in the projects segment, which suffered from low activity as well.

Like MMHE, it did however see bid/tender activity levels in the Middle East, Asia and Australia coming online by 2019 however.

MMHE’s Wan Mashitah said jobs were currently scarce due to oil price volatility with major players deferring a lot of investment decisions. "However, these oil majors will not defer their investments indefinitely. Should the oil price continue to improve and stay stable, we should see more jobs in the market in the future," she noted.