SapuraKencana facing pressure, cutting costs

With charter rates for its rigs coming down and margins being compressed SapKencana has to resort to cost cutting measures internally to preserve the margins, he said. Meanwhile, three out of its 21 rigs are not chartered out although the company is aggressively looking for charterers.

Further illustrating the grim outlook, Shahril said utilisation of its fabrication yard is at 80% but this can quickly drop to 30% if it does not get new jobs by October when most of the existing jobs are completed.

SapKencana's tender book is just under MYR25bn ($6.7bn) while its orderbook stands at MYR24bn, mostly made up of long-term contracts.

Conceding that the operating environment was tough, Shahril reiterated that the company needs to get at least MYR6bn worth of jobs each year to maintain its topline and bottom line.

Shahril remained cautious on the outlook for the market, expecting oil prices to stay low for the next three to four years. He declined to givea range but noted that the base level would be $55 per barrel.

At the company's recent AGM, it was also announced that Seadrill head and prominent O&G figure John Fredriksen, is retiring from the board as its alternate director along with Mahmood Fawzy Tunky Muhiyiddin, who retired as its chairman of audit committee and independent, non-executive director.