Vallianz ceo Ling Yong Wah attributed the group’s strong operating performance to existing long-term vessel charter, the commencement of new vessel charter contracts with a key Middle East national oil company (NOC) and its cost-cutting initiatives.
“Since 1Q2017/18, the group has started new charter contracts for four vessels with our NOC customer. We expect to continue deploying additional vessels over the course of the next two quarters,” Ling said in a press release.
He noted that Vallianz has grown into one of the largest OSV players in the Middle East and forged a close relationship with its key NOC customer which is a major player in the region’s offshore oil and gas production as well as made inroads with new customers in Egypt and Turkmenistan.
“The Middle East will continue to be an exciting region for oil and gas activities. This outlook is supported by continued investments from the NOCs there, such as Saudi Aramco which has announced plans to invest $300bn in oil and gas projects over the next 10 years,” said Rawabi Grop chairman Sheikh Abdulaziz AlTurki.
After a refinancing exercise last year, the Rawabi Group has become Vallianz’s biggest shareholder and a strategic partner.
Looking ahead Ling said: “There are tentative signs of a recovery in crude oil prices as the strategies by OPEC and Russia to curb crude oil production have led to a tighter demand-supply situation.”
He warned however that despite the improved conditions in the global oil and gas industry, the OSV segment continues to face a challenging operating environment. An overhang in vessel capacity amid slow demand and intense competition among OSV operators continues to depress vessel utilisation rates and exert pressure on charter rates, Ling added.
Vallianz has done well in the circumstances though. As at 31 December 2017, it had a robust chartering services order book with total value of approximately $900m, comprising mainly long term charter contracts that stretch up to 2025 inclusive of two-year extension options.
“Despite the persistent adverse market conditions in the OSV sector, Vallianz has been able to forge ahead as our strategy to focus on securing long term vessel charters with national oil companies is paying off,” Ling concluded.