The hook-up and offshore platform maintenance contracts worth a combined MYR10bn ($3.1bn) over five years, is one of Petronas’ largest service contracts currently in place, CIMB Research oil and gas (O&G) analyst Norziana Mohd Inon was quoted as saying.
Petronas said earlier this week that the contract involved the hook-up and commissioning and maintenance services for offshore facilities and included all the necessary services, such as manpower services, marine spread services, and tools and equipment required for the execution of the respective work scopes.
The local contractors would be providing services to nine Petronas production sharing contractors, namely, Petronas Carigali, Sarawak Shell Bhd & Sabah Shell Petroleum Co, ExxonMobil Exploration and Production Malaysia Inc, Murphy Sarawak Oil, Hess Oil and Gas, Talisman (M), Newfield Peninsula Malaysia Inc, and JX Nippon Oil & Gas Exploration (M).
The package is part of Petronas’ Pan Malaysia Integrated Hook-Up & Commissioning and Topside Major Maintenance Contract (Pan Malaysia Integrated HUC and TMM Contract) and was awarded to Kencana HL, Dayang Enterprise, Petra Resources, PBJV, Carimin Engineering Services and Sigur Ros from this year.
These represent the best and brightest of the local players and reflect Petronas’ certain obligations to build up the local industry, especially among bumiputra players. The contract winners were no surprise and analysts said the awards had already been priced in.
SapuraKencana Petroleum unit Kencana HL, scored a huge win with two packages worth a combined MYR800m. Analysts said the company is already working on these projects with almost two thirds of the work scope requiring the provision of various offshore support vessels, which SapuraKencana provides from its owned fleet.
Malaysia’s offshore O&G sector looks set to grow with a steady flow of contracts this year. According to Infield systems data, Malaysia’s offshore service expenditures could rise by 54% to $17.6bn in 2011-2016, compared to $11.4bn in the preceding five-year period. This would put Malaysia in a leading position, making up 20% of total Asian offshore expenditure, ahead of Thailand and India.
Much of this has come with Petronas’ investments, with the continued development of marginal fields and enhanced oil recovery projects as well as the HUC as it reaffirms its commitment towards spending an average of MYR60bn a year in the next few years to meet its MYR300bn five-year capital expenditure plan.
This capex could boost the local O&G sector with many of the awards taking effect in the fourth quarter.
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