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Barakah Offshore "feeling strain" in getting new jobs

Barakah Offshore "feeling strain" in getting new jobs
Malaysian oil and gas offshore pipeline service provider Barakah Offshore Petroleum is the latest to jump on the slow train wagon, claiming that although it has submitted about MYR1b ($273m) worth of bids for jobs both here and overseas it is still feeling the strain when it comes to securing new contracts.

“We’ve secured jobs this year but we don’t know about next year,” vice-president and chief corporate officer Abdul Rahim Awang told local media.

He joined the refrain of complaints that oil majors that dish out jobs to companies such as Barakah are adopting a wait-and-see attitude on the back of overall weak crude oil prices.

Meanwhile, for work that is available, profit margins have been squeezed, falling from double-digit to single-digit as the job pie gets smaller and competition in the industry increases.

“There are actually still a lot of jobs in the pipeline but most oil companies are holding back. A lot of it depends on when they want to implement their projects,” says Abdul Rahim, a former chief financial officer with Kencana Petroleum.

“Basically, jobs are hinged on their capital expenditure rollout,” he adds.

Barakah gets its jobs from companies like Petronas, Shell and Petrofac.

Besides local jobs, it has also done work in both Indonesia and Vietnam. Fresh bids for new jobs have been submitted in those countries.

Abdul Rahim said that for now, Barakah’s orderbook of about MYR1.8bn should keep it busy until 2017.

Some of these jobs include hook-up and commissioning (HUC) for oil platforms in Peninsula Malaysia, Sabah and Sarawak as well as pipeline works for Petronas’ Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor.

Barakah has secured some MYR130m of work year-to-date, with the latest being a contract from Sarawak Shell to supply operational pipeline inspection gauges, accessories and related equipment and services.

“We are also participating in some pre-qualification exercises,” he said without elaborating.

The target for order book replenishment this year is MYR300m.