- The Star reports today that the Tembikai and Cenang
marginal field risk-service contract (RSC) will be re-opened for tender next
month. The report added that up to two new marginal fields may be included to
make the RSC bid more attractive. Prequalified bidders induce Australia-based
oil & gas service companies such as Hydra Energy Holdings, Tap Oil Ltd and
AWE Ltd. Hydra Energy’s local partner is reported to be Daya Materials, which
provides engineering and construction, specialised listing and material-handling
services, speciality chemicals and advanced polymers with a market
capitalisation of RM250mil.
- Recall that the former front-runner for the Tembikai RSC
was the joint-venture between Scomi Group and Australia-based Cue Energy
Resources, which eventually stalled. Our recent meeting with Scomi’s management
indicated that the group, while is still involved in this bidding via Cue
Energy, does not appear optimistic about its chances. In November last year,
Cue Energy’s interim chairman and chief executive officer resigned. With
Tembikai likely to fall out of the grasp of the Scomi Group-Cue Energy JV,
potential bidders with larger balance sheets such as Bumi Armada and
SapuraKencana have emerged into the limelight.
- The Tembikai and Cenang RSC was supposed to be awarded
late last year after Canada-listed Coastal Energy secured the Kapal, Banang and
Meranti (KBM). The Tembikai and Cenang discoveries are located near Talisman
Energy-operated Block PM 314 off Peninsular Malaysia. The bidder list for the
two fields had included international oilfield services providers Baker Hughes,
Haliburton and Petrofac as well as AWE and Hydra Energy. Potential Malaysian
players in discussions with these foreign players include SapuraKencana,
Dialog, Alam Maritim, Daya Materials and Scomi Oilfield Services.
- Unlike the three earlier RSCs already awarded to
SapuraKencana-Petrofac, Dialog-Roc Oil-Petronas Carigali and Coastal Energy,
the Tembikai and Cenang marginal field developments would primarily target
early gas, not oil production. Recall that foreign players have to involve
local companies for at least 30% participating interest in order to secure RSCs
in Malaysia. Contractors are reimbursed on operational and capital expenditures
on achieving production start-up. The project cost for each RSC is estimated at
between US$500mil and US$1bil.
- As mentioned in our past reports, the delays in the award
of the RSCs are consistent with the temporary slow-down of the rollout of oil
& gas related projects in Malaysia due to technical issues. This includes
the Pan-Malaysian tender for hook-up, construction and commissioning (HUCC)
works potentially worth RM8bil, in which 3 major contracts have been delayed
from end-2012 to end-1Q2013 and mid-2013. But a major fabrication contract that
could be officially awarded soon is likely to be the over RM1bil Malikai
tension leg platform production facility for the JV between Malaysia Marine
& Heavy Engineering Holdings and Technip. In 2H2013, the rollout of the second
phase of the North Malay basin gas cluster project, which will involve a large central
processing platform at the Bergading field and multiple satellite well-head
platforms, should sustain the re-rating momentum.
This will be supported by further newsflows at the RM60bil RAPID project in
Pengerang and tank terminal projects in Southern Johor together with massive
gas cluster projects off Sabah and Sarawak which are tied in to the expansion
of the Bintulu LNG complex in 2015. Hence, we maintain our OVERWEIGHT call on
the sector with BUY calls being SapuraKencana Petroleum, Bumi Armada, Dialog
Group and Alam Maritim Resources.
Source: AmeSecurities
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