MISC cautious on expansion, does not see recovery till 2018: chief

“Despite oil prices hovering at higher levels today than in 2016, we believe 2017 will be another rough and tough year for service providers in the oil and gas supply chain," president and ceo Yee Yang Chien was quoted as saying.

He noted that optimism would not return unless oil prices trended higher and this was not yet imminent. “We feel that the higher trend could be a possibility in 2018," Yee said.

“Meanwhile, it is still the survival of the fittest for this year," he warned.

Yee pointed out that MISC has "been very successful in our business and asset portfolio rebalancing initiatives over the years".

“This strategy is clearly seen in 2016 as our present portfolio of floating production, storage and offloading (FPSO) and floating, storage and offloading (FSO) as well as liquefied natural gas (LNG) vessels and dynamic positioning shuttle tankers, all on long term employment underwrote our financial performance in 2016 despite the challenging market conditions with weak energy prices," Yee noted.

MISC now has four core business areas that it will focus on developing and growing.

In terms of asset acquisitions, MISC expects the delivery of two new LNG carriers and two LR2 product tankers in 2017 all of which will go straight into long term contracts. “We have another two more new LNG carriers and up to six new petroleum tankers scheduled for delivery in 2018,” added Yee.

Meanwhile looking at the stabilising oil price, Yee believes MISC’s offshore business division, which groups its portfolio of floating production systems, and its petroleum shipping business which comes under AET, will be the first to benefit from any further uptick in oil prices.

“We are already beginning to see new opportunities appearing in 2017 for these two segments and we would certainly desire to secure some attractive projects in the months to come," said Yee.

Yee cautioned however that 2017 would be a more difficult year for AET in the petroleum tanker segment due to the expected higher delivery of new vessels during the year.

“We are bracing for a weaker market condition for the petroleum tanker segment in 2017,” Yee said.