Thursday, 31 July 2008

Baneng moves into oil sector with Atmos buy

GARMENT maker Baneng Holdings Bhd has bought an engineering and fabrication company for RM800,000 to diversify into the oil and gas sector.

Executive director Albert Lim Meng Hong said Atmos Engineering Sdn Bhd, the firm that it is buying, has secured jobs worth a combined RM20 million from various oil majors, which will bolster Baneng's earnings. Atmos is also bidding for contracts that are worth up to RM200 million in total, he said.

With a paid-up of RM500,000, Lim said, Atmos has had limited resources and needed to tap onto Baneng's access to the capital market as a public-listed company to raise funds for its projects.

He did not elaborate on Baneng's plan to raise money, but said that it is talking to bankers.
"Atmos will contribute to our earnings from next year. We are still negotiating and there will be more acquisitions to come," he told reporters after signing with Atmos in Kuala Lumpur yesterday.

Baneng will still retain its core business of manufacturing, knitting and dyeing of fabrics and other apparels, he said.

"We will position ourselves in garment manufacturing and oil and gas for now, but will still look for any other businesses that can bring in more income," he added.

Baneng has been on the lookout for strategic purchases in the last three years, he added.

Shares of Baneng have risen 59.1 per cent this year, a stark contrast to the 19.7 per cent fall in the Kuala Lumpur Composite Index over the same period.

The usually thinly-traded stock has also seen some active transactions recently.

Baneng closed 1.4 per cent lower at 70 sen yesterday.

Source : Business Times

Dayang bids for RM900m oil&gas jobs

UPSTREAM oil and gas services provider, Dayang Enterprise Holdings Bhd, is bidding for oil and gas-related services jobs in Malaysia worth RM900 million from various oil majors.

In a statement yesteday, the company said it now has an order book of RM677 million, which is set to last until 2012.

Dayang is also confident of exceeding its 15-month net profit forecast of RM46 million for the financial year ending December 31, 2008.

The company’s year to date net profit stands at RM43.3 million.

Its managing director, Tengku Yusof Tengku Ahmad Shahruddin, said given the bright industry outlook, the company is positive of achieving further growth, both operationally and financially.

In its filing to Bursa Malaysia, Dayang said it recorded a pre-tax profit of RM19.8 million on the back of RM41.6 million in revenue for the third quarter period ended June 30, 2008.

For the quarter, offshore topside maintenance services operations, which include hook-up commissioning and minor fabrication services, continued to be the major contributor to the company, contributing 81 per cent to revenue and 84.5 per cent in profit, it said.

Source : Bernama

Scomi Oiltools unveils plant in Scotland

SCOMI Oiltools (Europe) Ltd has unveiled its new quayside plant in Scotland yesterday.

Located in Aberdeen Harbours Pocra Quay, Scotland, the new facility is part of a £10 million investment in its north-east business, the company said in a statement yesterday.

Scomi Oiltools, a subsidiary of Scomi Group, is one of the world's leading providers of innovative, high performance drilling fluids solutions and state-of-the-art drilling waste management services.

The company said the 10,000 barrels capacity storage facility marked the launch of the company’s fluids division in the United Kingdom and underlined its commitment to the North Sea energy sector.
The facility would provide a seamless, integrated package of well fluids and drilling waste management.

Scomi Group’s oilfield services division president Chris Pianca said:

“With the dynamic market conditions in the recent years, we have been growing internationally at a phenomenal rate.”

He said the new project was a significant development for the group as drilling fluids and the international markets offered a huge growth opportunities.

Since 2005, Scomi’s drilling fluids markets have expanded from three countries to 15 countries.

Source : Bernama

Uzma close to finalising talks on drilling contract

Oil and gas services provider Uzma Bhd hopes to conclude talks with a Mongolia-based company on an exploration and drilling contract by year-end, said managing director and chief executive officer Datuk Kamarul Redzuan Muhamed.

”We cannot disclose the value of the contract for the time being. Discussions are currently at the advanced stage with details of the contract being finalised. We hope to conclude talks by year-end,” he said at the company's listing on the Bursa Malaysia second board yesterday.

Uzma opened 20 sen below its offer price of RM1.90.

Commenting on the opening price, Kamarul said the company was pleased with the stock's performance despite the lacklustre trading on Bursa Malaysia.

“Our fundamentals are still strong and our plan is on track. There are exciting things ahead for the group,” he said.

Uzma, which has a presence in more than 30 countries, has an order book of RM129mil. It recently secured a US$100,000 contract in Iran for a software job.

“We have close to about 70% of the order book that we forecast for 2008,” Kamarul said, adding that the group was tendering for about RM450mil worth of jobs.

He said the success rate of the tenders depended on the type of jobs pitched for.

“For our core businesses of geoscience and reservoir engineering, and drilling services, we have been looking at 35% to 40% success rate.

“On project and operation sites which is something new for us, the success rate is 15% to 25%,” he added.

Uzma also planned to set up operation offices in India by year-end and in North Africa by end-2009, Kamarul said.

“Uzma will also strengthen its international presence by expanding its business coverage in existing overseas markets such as Indonesia, the Middle East, Thailand and Australia by end of this year,” he added.

He said the company was expecting a 35% year-on-year growth this year.

Source : The Star

Wednesday, 30 July 2008

Indonesia's makes 'sovereign' decision to withdraw from OPEC

Chakib Khelil, president of the Organization of Petroleum Exporting Countries, while acknowledging that Indonesia has played an important role since joining the organization in 1962, said its plan to withdraw from the group is a "sovereign" decision.

Khelil also indicated that several options were available, saying that Indonesia could either suspend its membership or remain in the organization as an observer once its membership expires at yearend.

"All the options are open, but it is up to Indonesia to the make the decision," Khelil said.

Indonesia's Energy and Mineral Resources Minister Purnomo Yusgiantoro repeated his country's aim of leaving the group when its membership expires at the end of the year, saying that, "We have become a net oil importer."

Indonesia's future
Indonesia turned a net oil importer in 2003 on declining production of oil together with increasing domestic consumption. However, government officials have said Indonesia could rejoin OPEC in the future if its oil production and exports pick up again.

The discussion over Indonesia's future in OPEC coincided with reports that—due to continued low domestic production and spiraling consumption—the country's oil and fuels trade balance has been in deficit for the first half of this year and is likely remain in deficit for the remainder of 2008.

Economist Faisal Basri of the University of Indonesia (UI) said the deficit stood at $5.5 billion as of the end of May, with oil and fuel imports reaching $13 billion while exports earned just $7.56 billion.

"We are heading toward a very critical situation if we don't formulate a proper energy policy. The deficit is predicted to be $15 billion at the end of this year," said Faisal at a discussion on the energy crisis held by UI.

The big gap between the fuels import and export shows the country has poor production but massive consumption, said Faisal, who added that inefficiencies at state-owned Pertamina have contributed significantly to the wide gap between imports and exports.

Faisal offered a comparison to illustrate his point, saying, "Pertamina's cost recovery in 2007 was $36.10/bbl, while Chevron's [Corp.] was only $6.80/bbl."

Investors needed
Meanwhile, Indonesia's recent efforts to attract new investment into the oil and gas sector have not been as successful as government officials had hoped.

According to Evita H. Legowo, the newly appointed director general of oil and gas in the ministry of energy and mineral resources, half of the 21 oil and gas blocks offered by the government last year failed to attract investors.

"We don't know exactly why some blocks didn't attract any investors. It could have been that investors had doubts about the data or maybe they needed more advanced technology to operate the blocks on offer," said Evita.

In a renewed effort to attract investment, the government plans to open a new auction for oil and gas blocks in October or November, and may include those blocks leftover from the last round.

"We are still formulating which blocks we will offer. We are also still deciding whether the unsold blocks would be offered again or not," said Evita, who did not disclose which blocks remained unsold.

In May 2007, the government put up 21 oil and gas blocks for auction: North X Ray Block in West Java; N. E Lombok I and N.E Lombok II blocks in Nusa Tenggara; Semai I, Semai II, Semai III, Semai IV and Semai V blocks in West Papua; South East Tual block in Arafura; Cakalang block in Natuna; Kerapu, Baronang, Cucut, and Dolphin blocks in Nautana; Bawean II, East Bawean I, Gunting and Situbondo blocks in East Java; Buton II block in Buton; Rangkas block in Banten; and West Timor block in Timor.

Source : Oil & Gas Journal

Sunday, 27 July 2008

Seized Nigeria oil workers freed

Eight foreign oil workers, kidnapped by Nigerian militants, have been freed unharmed, an army spokesman says.

In the early hours of Saturday, a group of gunmen in a speed boat attacked a petroleum tanker on the Bonny river in the south of the country.

Two people were shot and injured while eight oil workers, believed to include a number of Russians, were seized.

"They have been released," about 2030 (1930GMT), said Lt Col Sagir Musa. "I doubt any ransom was paid."

The nationalities of those seized have not yet been confirmed, and no group has claimed responsibility.

More than 200 foreign oil workers have been kidnapped in the Niger Delta over the past two years but often released after payment of ransom.

It is believed the tanker which came under attack belongs to Global Gas and Refining Ltd, a Nigerian subsidiary of US-based Global Energy Inc, which has been stationed along the Bonny river for more than two years.

Lt Col Musa, military spokesman in the eastern Niger Delta, said earlier: "Around six heavily armed bandits attacked an LPG (liquefied petroleum gas) tanker, shot two civilians and abducted eight of the expatriates, whose identity is not yet ascertained."

He said the two civilians had been wounded but not killed during the attack, which took place between 0100 and 0400 (0000-0300 GMT).

Late on Thursday, 12 people were kidnapped from a boat near the Niger Delta. Seven of them were later freed but five people remain captive.

Source : BBC News

Saturday, 26 July 2008

Nigerian militants kidnap expats

Five eastern European oil workers have been kidnapped by Nigerian militants, security officials have told the BBC.

Twelve workers from Ukraine and Russia were on board a boat that was attacked while in international waters off the Niger Delta, but seven have been freed.

The boat, which belongs to the Saipem oil services company, was attacked about 85 nautical miles from the coast, after it had left its naval escort.

A spate of attacks on the oil sector has cut Nigeria's production by 25%.

The boat has also been freed and is on its way back to the region's main city, Port Harcourt, the officials say.

This is one of the attacks carried out furthest from Nigeria's coast, correspondents say.

Until recently, they have usually operated on land or in the creeks of the Niger Delta.

Nigeria's oil militants say they are campaigning for more of the country's oil wealth to be used to benefit residents of the Niger Delta.

But correspondents say there are also many criminal gangs motivated by the ransom money often paid by oil companies to secure the release of their workers.

Earlier this week, the head of Nigeria's state-owned oil company told a parliamentary enquiry it had paid $12m to oil militants to prevent them attacking a pipeline.

Source : BBC News

Cameroon kills Bakassi attackers

Cameroonian soldiers have killed 10 gunmen who attacked them in the disputed oil-rich Bakassi peninsula, officials say.

Nigeria is transferring the peninsula to Cameroon under a World Court order, despite opposition from locals.

A little-known armed Nigerian group opposed to the handover of the territory, said only four of its men had been killed in the raid.

At least one Cameroon soldier was also killed during the clashes.

It was the second attack on Cameroonian positions in Bakassi within a week.

Cameroon's defence ministry said its men had fought off an attack men in three speed boats.

Ebi Dari, a spokesman for the Niger Delta Defence and Security Council (NDDSC), confirmed its fighters were behind the raid.

"It is true our men came under intense gunfire from the Cameroon military, but only four of them were killed and two taken hostage. They also seized one of our speed boats and the arms that were inside," he told Reuters news agency.

The Nigerian forces are due to complete their long-delayed full withdrawal from Bakassi in mid-August to comply with a 2002 court order by the International Court of Justice, which ruled in favour of Cameroon.

Most of the area's inhabitants are Nigerian fishermen and many are opposed to the handover. Some Nigerian politicians also voiced their opposition to the handover last year.

Nigeria reinforced troops on its side of the border after 21 Cameroon troops were killed in Bakassi in November 2007.

Nigerian troops withdrew in August 2006 but the peninsula will remain under Nigerian civil administration until 2008.

Nigeria and Cameroon sought arbitration after a series of bloody clashes in the 1990s.

Bakassi juts into the Gulf of Guinea, an area which may contain up to 10% of the world's oil and gas reserves. It is also rich in fish.

The peninsula has been administered by Nigeria since independence from Britain in 1960.

However, Cameroon based its claim of sovereignty over the region on maps dating back to the colonial era.

Source : BBC News

Technip to build region's 1st flexible-pipe plant in Johor

MALAYSIA will be at the forefront of high technology in flexible-pipe making in the Asia-Pacific region when French engineering group Technip starts its plant in Tanjung Langsat near Johor Baru in 2010.

The RM600 million plant will be built by its local unit, Asiaflex Products Sdn Bhd. Technip group president and chief operation officer Bernard Di Tullio performed the groundbreaking ceremony in Johor yesterday.

"This is our third manufacturing facility after Le Trait, France, and Vitoria, Brazil, and it will be the only plant to manufacture flexible pipes in the Asia-Pacific region," he said.

Technip caters to the oil and gas industry, and the new plant is part of plans to strengthen its presence in the sub-sea segment and reinforce its worldwide leadership in the flexible market.

Technip currently holds about 60 per cent of the flexible-pipe market in the world, supplying major oil companies.

Asiaflex Products will focus on the needs of the emerging deep-water oil and gas markets in the Asia-Pacific and Middle East region.

The plant has also been designed with an expansion in mind, should the need arise.

It is expected to provide jobs for around 300 people once it starts operations, with an expected annual capacity of 200km of flexible pipes. This will bring Technip's total annual capacity to 1,000km.

Source : Business TImes

Friday, 25 July 2008

Kencana unit gets RM48m Murphy Sarawak job

KENCANA Petroleum Bhd’s unit Kencana HL Sdn Bhd has secured a RM48 million contract from Murphy Sarawak Oil Co Ltd.

The contract comprises the provision of mechanical and piping installation works for Bintulu Onshore Receiving Facilities (BORF).

It also forms part of Phase 1 of SK309/SK311 gas field development located offshore Bintulu, Sarawak, said Kencana in a filing to Bursa Malaysia.

The scope of works include project management and construction engineering activities for mechanical equipment installation/erection works including unloading and storage at BORF, electrical and instrumentation equipment installation, plant piping works, tank fabrication and erection, flare structure, onshore export gas and dry gas pipelines and safety system including equipment supply.

The contract is expected to be fully completed by March 15, 2009.

The contract is expected to contribute positively to the earnings of Kencana Petroleum Group for the financial year ending July 31, 2009

Source : Bernama

Petronas Dagangan not taking over Esso stations

PETRONAS Dagangan Bhd, the listed subsidiary of Petroliam Nasional Bhd (Petronas), has not ruled out the possibility of acquiring service stations operated by other oil companies.

However, it dismissed talk that it would take over Esso's retail assets.

Chairman Datuk Anuar Ahmad said the company had not engaged in any talks with Esso, a unit of the US-based ExxonMobil Inc, to acquire the latter's service stations in Malaysia.

"I am surprised when you ask the question. As far as I know, Esso has sold off 20 service stations in Sarawak to a company called Excel. We did not have any discussions with Esso to acquire its remaining service stations," he said.

Nevertheless, the acquisition of service stations is part of Petronas Dagangan's strategies to sustain growth and profitability in addition to organic growth, he added.

"We may look at the acquisition of service stations if the offer is on the table," Anuar told reporters after Petronas Dagangan's annual general meeting in Kuala Lumpur yesterday.

On another development, Anuar said Petronas Dagangan was looking at spending some RM500 million to open 50 service stations during the financial year ending March 31 2009.

At present, Petronas Dagangan operates 903 service stations, of which four are hyper-stations and 82 stations that offer both petrol and diesel fuels and natural gas for vehicles (NGV).

"Depending on the location of the proposed new stations, we expect to spend up to RM10 million for a station. It would cost us more to build a hyper-station as it needs larger land.

"For NGV, the planning and assets are handled by a different subsidiary, namely Petronas NGV Sdn Bhd," Anuar said.

Petronas Dagangan registered pre-tax profit of RM908.4 million on revenue of RM22.3 billion in the financial year ended March 31 2008.

Its retail business accounted for 42 per cent of total revenue, with commercial industrial business contributing the remaining 58 per cent.

In view of its sound financial performance, Petronas Dagangan is recommending a final dividend of 33 sen per share to its shareholders.

Together with the interim dividend of 12 sen per share paid in December last year, total dividend for the financial year is 45 sen per share.

Source : Business Times

Ranhill said close to being taken private

RANHILL Bhd is close to being taken private by controlling shareholder Tan Sri Hamdan Mohamad in a deal that can be worth about RM420 million, says a source.

The source told Business Times that Hamdan, who controls the engineering firm and is also the group's president and chief executive officer, is working out the details to take it private within the next three to four months.

Hamdan and Ranhill executive director Datuk Chandrasekar Suppiah could not be reached for comment.

Analysts said the controlling shareholders of Ranhill had toyed with the idea to take it private as the stock has relatively underperformed.

Ranhill shares have dipped by some 70 per cent this year trading as low as 79 sen in the last few weeks from a RM2.65 high in January.

Yesterday, the stock closed five sen higher than the previous day's closing of 91.5 sen, with 77.7 million traded shares.

"Even if we assume there is no value attached to its construction and EPCC business and only assigned value to its 100 per cent stakes in Ranhill Utilities Bhd (RUB) and Ranhill Power Bhd (RPB) based on their respective privatisation valuations of RM1.1 billion and RM258 million respectively, coupled with debts of about RM100 million at holding company level, Ranhill's theoretical sum or parts fair value works out to about RM1.98 apiece," the analysts said.

"This is very close to its net tangible asset of RM1.91 a share as at March 31 2008," they added.

For the 12-month period to June 2007, Ranhill posted a profit of RM117 million and revenue of RM1.47 billion.

Last September, Ranhill announced plans to take its power arm, Ranhill Power Bhd (RPB, private by buying the rest of its shares for RM35.4 million, or RM2.15 apiece, and consolidating the power company under the group to maximise returns.

Business Times reported in January that Hamdan was mulling to take Ranhill and RUB private and re-list the shares in London, Dubai or India to command a higher valuation.

Ranhill responded saying that they would always seek proposals to improve shareholder value.

Five months later on June 6, Ranhill announced to Bursa Malaysia that Hamdan was taking RUB private under a RM305.11 million takeover offer.

Hamdan and partner Ahmad Zahdi Jamil are offering RM3.50 each for the remaining 87.17 million shares, or a 29.60 per cent stake, in RUB.

The offer price represents a 38 sen premium to RUB's share price of RM3.12 at the time the announcement was made.

Source : Business Times

Thursday, 24 July 2008

ExxonMobil takes over Mitra's stake in oil block

EXXONMOBIL Corp is taking over the 50 per cent stake in an oil block in the Philippines' Sulu Sea, previously held by Malaysia's Mitra Energy.

Exxon is buying the stake in the block, known as Service Contract 56 (SC 56) for an undisclosed price, a government official said.

A government official with the Philippines' Department of Energy said the US company has just bought a huge three dimensional (3D) seismic survey over SC 56.

It is due to start drilling a well next year.

Originally, Mitra was awarded the Camago-Malampaya field, but the contract was withdrawn as the Philippines government said it was not given according to procedure.

"Mitra's development of the Malampaya oil leg was cancelled because it (SC 56 block) was not bidded out. Mitra's SC 56 was awarded on August 5 2005," the official told Business Times.

The Philippines National Oil Corp (PNOC) had clarified that the company has not signed an agreement with Mitra to look for oil in the Camago-Malampaya field off western Palawan.

Subsequently, fresh bids were invited late last year.

Mitra, which has exploration projects in the Philippines and Indonesia, had initially estimated that the Malampaya field may yield a total of 41 million barrels of oil over four years.

The total project cost of the Camago-Malampaya field is expected to be about US$684 million (RM2.22 billion).

Mitra and PNOC are already partners in the Calamian oil exploration project in the Philippines.

Mitra's investors comprise international financial institutions and individuals including from the UK.

Source : Business Times

'500km gas pipeline project on track'

The estimated RM390 million gas pipeline project to channel gas from Kimanis in Sabah to Bintulu in Sarawak is on schedule, says Petronas president

THE 500km gas pipeline project linking Sabah and Sarawak and 300-megawatt gas-driven power plant in Sabah are on, the chief of national oil corporation Petroliam Nasional Bhd (Petronas) says.

"At the moment, it (gas pipeline project) is on schedule," Petronas president and chief executive officer Tan Sri Mohd Hassan Marican told reporters after Petronas Gas Bhd's (PetGas) annual general meeting in Kuala Lumpur yesterday.

A Sabah Barisan Nasional component party had asked the state government to insist that Petronas call off the project to channel gas from Kimanis to Bintulu in Sarawak.

United Pasokmomogun Kadazandusun Murut Organisation president Tan Sri Bernard Dompok said it should be stopped to encourage downstream processing of gas pumped from offshore fields along Sabah's west coast.

Prime Minister Datuk Seri Abdullah Ahmad Badawi had reportedly told Sabah BN component party leaders at a meeting on May 31 that the project would be stopped.

On June 11, however, Petronas vice-president of gas business Wan Zulkiflee Wan Ariffin was quoted as saying that the estimated RM390 million project would proceed and that it was due for completion by March 2011.

Hassan said Petronas would operate the pipeline, while the project would be carried out by production-sharing contractors.

The gas would be channelled to Petronas' liquefied natural gas complex in Bintulu.

Hassan also said that the power plant in Kimanis would be jointly built with Yayasan Sabah.

"It is very much in line with the gas pipeline project," he said, adding that the plant's development cost could not be deter-mined as yet.

On another note, Hassan (pic) said he did not foresee the gas price hike as having any major impact on PetGas since it is both a supplier and a user.

He said PetGas would talk to its customers to defray some of the impact of costlier gas.

PetGas expects things to be a bit more challenging financially as, according to Hassan, its effective tax rate is now on par with everybody's.

The company enjoyed tax incentives in recent years, but its tax expense increased ninefold to RM301.2 million in the financial year ended March 31 2008 from RM34.2 million the year before.

Source : Business Times

Inflation hits 26-year high on costlier petrol, diesel

MALAYSIA'S inflation level followed regional trends in June, with the Consumer Price Index (CPI) recording a 7.7 per cent hike as a result of the petrol and diesel price adjustments during the month.

The CPI soared to a 26-year high in June with the index reading 113.4 from 105.3, beating market expectations and a Business Times poll which had expected 6.74 per cent year-on-year growth.

The Statistics Department said the CPI for the first half of the year increased by 3.7 per cent compared to the same period last year.

The index for food and non-alcoholic beverages for June increased 10 per cent, while the index for non-food rose by 6.7 per cent.

Between January and June this year, the index for food grew by 6.1 per cent compared to non-food which grew by 2.6 per cent.

Bank Islam Malaysia senior economist Azrul Azwar Ahmad Tajudin said going forward, the CPI may stay above the seven per cent year-on-year level until the first half of 2009 before trending downwards to around three per cent and below if there are no more revisions in fuel price and electricity tariffs.

However, he expects a 50-50 chance of a raise in the key benchmark interest rate from 3.50 per cent as Bank Negara Malaysia may want to ascertain the knock-on effects of the review in retail fuel prices.

"Should Bank Negara stand pat in its monetary policy meeting tomorrow, I expect it to commence its mild monetary tightening cycle, just to send signals to markets that it is not behind the curve in the combat against inflation."

HSBC Bank economist Robert Prior Wandesforde said the headline rate must now have reached a level that the central bank simply cannot ignore, fearing second-round effects on inflationary expectations.

He said the main contribution to the June CPI came from the jump in transport price inflation (from 0.9 per cent to 19.6 per cent), which added 2.9 per cent points to the headline rate.

The big jump in food price inflation from 8.2 per cent to 10 per cent accelerated the growth as the component suggests that the country's food subsidies can only go some way to disguising the jump in international food commodity prices.

"Food prices will also have been impacted by the strength of energy as well as demand-pull factors, bearing in mind that real consumer spending in Malaysia has been growing at a double-digit for four quarters now," he added.

Source : Business Times

Kencana deputy chairman buys 25m shares

Kencana Petroleum Bhd deputy chairman Chong Hin Loon acquired 25 million Kenanca shares from the major shareholder Khasera Baru Sdn Bhd on July 16.

A filing with Bursa Malaysia showed Chong’s shareholding increased to 101.3 million shares or 11.23% after the acquisition of the 2.77% stake.

A separate filing showed Khasera’s stake was reduced to 383.53 million shares or 42.52% after the disposal of the shares.

The share price closed at RM1.89 on that day. Its 52-week high was RM3 on July 26 last year while its 52-week low was on March 18 when it fell to RM1.20.

At the current price of RM1.90, Kencana is trading at a trailing price-to-earnings of 21.06 times.

Kencana provides integrated engineering and fabrication of production facilities for the oil and gas industry.

Source : The Star

Wednesday, 23 July 2008

Tabung Haji buys 14m Ramunia shares

Lembaga Tabung Haji accumulated 14.23 million shares of Ramunia Holdings Bhd from July 10 to 16.

A filing with Bursa Malaysia showed the national pilgrimage fund’s shareholding in Ramunia increased to 18.06% or 99.74 million shares after the recent acquisitions.

It acquired 517,000 shares on July 10 and 9.7 million shares the next day. It bought two million shares on July 14 and 2.02 million shares on July 16. The share price was trading between RM1.54 and RM1.59 during that period.

Ramunia’s share price rose to a 52-week high of RM1.95 on Feb 13 this year while its 52-week low was 76 sen on Aug 17.

At the current price of RM1.60, it is trading at a historical price-to-earnings of 38.28 times.

MISC Bhd is taking control of Ramunia in a reverse takeover and the corporate exercise is expected to be completed by the fourth quarter.

Ramunia is involved in the fabrication of offshore oil and gas related structures and it is also involved in engineering and offshore marine services.

Source : The Star

New Oil Field Discovered In Southern Iran

A new oil field was discovered in the city of Abadan in the Persian Gulf province of Khuzestan, Minister of Oil Gholam-Hossein Nozari said on Tuesday.

He made the announcement on the sidelines of a national seminar on petrochemicals in Tehran, Iranian National News Agency, IRNA, reported.

According to Nozari, the deposited oil in the new oil field, 'Arvand,' is estimated as 500 million barrels.

Iran sits on the world's second largest proven oil reserves worldwide and is the number four crude producer and the second in the OPEC.

It also has the second biggest proven global gas reserves after Russia but so far has played only a minor role on the gas export market.

Source : Bernama

Tuesday, 22 July 2008

Perisai in talks to buy navy vessel for FSO conversion

Perisai Petroleum Teknologi Bhd is looking to finalise the purchase of a supply tanker that the company plans to convert into a floating storage offloading vessel (FSO) to support production in marginal oil fields.

In June, Perisai entered into an exclusive option agreement for the vessel purchase with FPSO Shiraz Pty Ltd, a special purpose company owned by Helix ESG and AGR.

FPSO Shiraz Pty Ltd was formed for the purpose of converting the former Royal Australian Navy supply tanker, Westralia into a floating production storage offloading vessel.

Source : Energy Current

KNM down on financing concerns

Fast-expanding oil and gas player KNM Group Bhd continued to slide, shedding 25 sen yesterday to close at RM5.10 on concerns of its proposed exchangeable bond issue, in the current difficult period. At its lowest in intra-day trading, KNM fell to RM4.96.

The company’s shares were among the most active with 11.9 million shares traded. Since end- May this year, the company’s share has tumbled by about 27% and during the period in review, under-performed the sluggish Kuala Lumpur Composite Index by 13.5%.

According to Goldman Sachs, the dip in KNM’s shares is a result of fears as to whether the company’s proposed exchangeable bond issue will proceed, with the current weak market likely to be a dampener. KNM had taken a €350 million (RM1.8 billion) bridging loan to finance the acquisition of German-based Borsig Beteiligungsverwaltungsgeselschaft mbH, last month, and has since partially pared down some of these loans, by utilising proceeds from a RM1.1 billion one-for-four rights issue, which was completed end of last month.

KNM had proposed raising another US$350 million (or its equivalent) in exchangeable bonds to settle the remaining amount of the outstanding debts taken for the purchase.

Goldman said that checks with the company revealed that in line with the widening global credit spreads the indicative yield for their proposed exchangeable bond has risen by 100 bps to 4.8% now (30%-35% conversion premium) against the existing bridging loan’s 5.2%.

“Given the significant increase, KNM is exploring other options, including the possibility of issuing plain vanilla debt, which the company says has indicative yields of 5.5%-6%,” Goldman Sachs says in report recently.

The research house stated that KNM may launch the exchangeable bonds when market conditions improve and that it views the alternative plan positively.

Foreign funds such as FMR LLC and FIL Ltd have been trading KNM’s shares heavily, which could explain its high trading volumes. The two funds emerged as substantial shareholders in end July last year, with 5.2% or 54 million shares. Since then, the funds have upped their shareholding to above 10.7% or about 141.4 million shares.

Another fund, which has been actively trading KNM’s stock, is the Employees Provident Fund (EPF). The EPF has about 6% in KNM now.

Early last week, about 11 million shares in KNM were traded off market in 22 block trades of above half-a-million shares crossing at RM5.85 a share. This occurred in about a 10-minute span of time in the later part of morning trade.

For its first three months of FY08, KNM posted a net profit of RM54.1 million on the back of RM331.2 million revenue. In contrast to a year ago, net profit improved by about 41%, while revenue increased 26%.

In a short span of three years, KNM has grown to become one of the top oil and gas players providing a wide spectrum of services. In March this year, the company proposed to buy the German-based Borsig to expand its reach in Europe.

Source : The Edge

Vietnam fuel prices up 36%

Vietnam raised domestic fuel prices by as much as 36% yesterday, the first increase in five months, raising the spectre of even higher inflation, more interest rate rises and slower economic growth.

The steep increase in the price of petrol and diesel in Asia's second largest importer of these products came as a shock to consumers, many of whom were seen thronging gas stations before the new prices came into effect at 10am.

Analysts predicted inflation would hit 30% next month, the highest level in Asia.

The dong fell 4.5% against the US dollar in the black market as Vietnamese rushed to protect their money from being eroded by rising inflation. The Ho Chi Minh Stock Exchange fell 2.5%.

“Retail fuel price increases would be a very bad news for the stock market as the inflation rate could be worse in the months to come,” said Vo Quoc Khanh, head of research at FPT Securities.

Vietnam has been slower than its neighbours such as China, Malaysia and India in cutting subsidies and bringing domestic prices closer to international levels.

Yet, less than two weeks ago, the government had ruled out rises in fuel prices for the rest of the year, suggesting it preferred to bear the cost of subsiding petroleum rather than pushing consumer prices any higher.

Source : Reuters

Monday, 21 July 2008

Petra Energy likely to win Shell job

PETRA Perdana Bhd’s 60%-owned subsidiary Petra Energy Bhd stands a good chance of winning the bid for Shell Sarawak/Sabah’s new topsides major maintenance (TMM) contract due to its experience and fleet, said RHB Research.

The company had a track record with Shell and Petronas Carigali, as well as a fleet of accommodation and work barges that would become available at the end of its newly secured Shell contract alongside the new vessels to be delivered to both Petra Energy and Petra Perdana.

The research house said Petra Energy was at the tail end of the current four-year contract estimated to be worth over RM1 billion that expires in early-2009.

Petra Energy recently announced that it had been awarded a RM40 million contract for the maintenance, overhaul and repair of gas turbines on Shell Sarawak’s gas platforms. The contract is for a period of two years commencing June 23, 2008.

“While this is positive for Petra Energy, we believe the company’s earnings outlook is still dependent on the award of the new TMM contract for Shell Sarawak/Sabah,” RHB Research said.

The research house reiterated its outperform recommendation on the counter at RM3.58 with an indicative fair value of RM5.31 based on 11.5 times FY09 price earnings ratio (PER).

“We believe the shortage of offshore support vessels will not be alleviated until FY10 at the earliest, which underpins the cyclical up trend in rates,” it said.

RHB Research said Petra Energy still had over RM300 million worth of jobs for operations and maintenance and equipment repackaging, over the next two years.

“The company also would be able to charter out its two work barges at a profit of around RM18 million each.

“Including cost savings from the 2,000 contract engineering staff, the company would still be able to record a minimum pre-tax profit of around RM60 million to RM70 million versus our current forecasts of RM78 million to RM83 million for FY08 to FY09,” it said.

“For Petra Perdana, we have assumed average charter rates to rise 10% per annum from US$2.44 (RM7.98) per horse power per day in FY08, and utilisation rates to rise from 78% in FY08 to 81% by FY10,” it said.

Petra Perdana added two sen to close at RM3.60 last Friday.

Source : The Edge

Tanjung Offshore expands fleet

TANJUNG Offshore Bhd is on an expansion mode with nine offshore support vessels (OSVs) valued at RM418mil scheduled to be delivered in stages until early 2010.

Managing director Omar Khalid told Starbiz that the fleet expansion was propelled by high demand from the local as well as international oil and gas (O&G) industry.

“There is demand from oil majors all over the world, but operating in Malaysia is more cost-efficient,” he said, adding that six of its seven OSVs were in Malaysian waters while one was in Vietnam.

Under the fleet expansion plan, Tanjung Offshore will receive two anchor handling tug and supply (AHTS) vessels, Tanjung Puteri 1 and Tanjung Puteri 2 valued at RM48mil each next month.

The company expects the delivery of a well-testing vessel and a tug and utility boat valued at RM48mil and RM32mil respectively in the fourth quarter of the year.

An AHTS costing RM42mil will join its fleet in the third quarter of next year while four AHTS worth RM50mil each are scheduled for delivery in January 2010.

“We plan to have more AHTS vessels as it can tow oil rigs to location and anchor them up in shallow and deepwater fields.

“With the rampant oil exploration and production today, the demand is going up,” said Omar.

On its oil rig business, Omar said its jack-up drilling rig, THE 208, supplied to Murphy Oil would start operation in September. The rig is on a two-plus-two year contract worth RM500mil.

In March, the company commissioned its self elevating relocatable facility that is also on a two-plus-two year contract worth RM200mil.

Omar said the company's contract with Petrofac Ltd for the supply of its mobile offshore production unit (MOPU) has been extended for another five years and would end in 2013.

The MOPU has resume full operation this year after difficulties in unexpected cost increases and repairs last year.

The MOPU, which is a cheaper alternative to conventional platforms for smaller and marginal oil fields is now working at Chendor field, off the coast of Terengganu.

“All these investments and developments are expected to support stronger earnings for the company from the second half of the year,” Omar said.

Established in 2005, the Tanjung Offshore group is involved in the provision of integrated services to both upstream and downstream activities in the O&G industry.

Source : The Star

Bumi Armada expanding despite declining demand

BUMI Armada Bhd is on an aggressive fleet expansion drive despite concerns of declining global demand for vessels.

The company, which is Malaysia's largest owner and operator of offshore support vessels (OSV), launched its 46th offshore support vessel – the Armada Firman 2 – last week.

Bumi Armada executive director and chief executive officer Hassan Basma said the company was targeting to have over 70 vessels by 2009.

He added that the vessels would be financed via internal funds and bank borrowings.

“We are looking to be the largest OSV operator in South East Asia by 2009,” he told reporters after the unveiling of the Armada Firman 2 at the Drydocks World Shipyard in Tuas, Singapore recently.

The 6,000 brake horse power Armada Firman 2 is equipped with dynamic positioning capabilities, allowing the vessel to remain in a fixed position with the use of propellers and thrusters rather than physical moorings or anchors.

Construction works on the Armada Firman 3 – which is due to be completed by year end – are currently ongoing at the Drydocks World Shipyard,

Hassan said both the vessels (Armada Firman 2 and Armada Firman 3) would be deployed to Angola.

He is still optimistic about acquiring more vessels despite confirming a report by Bloomberg last week that the global demand for vessels was expected to slow down in the next two years due to rising oil prices.

According to Hassan, the lower demand for vessels would not be an issue for Bumi Armada as the company was providing newer, more powerful and better-equipped vessels for charter compared with their competitors.

Apart from OSVs, Bumi Armada's fleet comprises floating production, storage and offloading (FPSO) vessels, anchor handling tug and supply vessels and workboats and barges.

Bumi Armada serves clients in Malaysia and countries within South East Asia, the Middle East and West Africa.

Hassan said 65% of annual revenue came from operations in the domestic market while the remaining 35% were from overseas.

“Going forward we expect this ratio to reverse,” he said, adding that 25% of its business currently comprised doing fleet work associated with Petroliam Nasional Bhd.

Hassan also said Bumi Armada had plans to acquire at least one FPSO a year. The company currently has two – the Armada Perkasa and Armada Perdana.

Source : The Star

Oilcorp’s proposal to remove auditor keenly watched

OILCORP Bhd management's proposal to shareholders at the company's EGM today to remove Baker Tilly Monterio Heng (BTMH) as its external auditor and to appoint Messrs Horwarth as its new auditor will be keenly watched by investors, regulators and the public.

While the proposal is within management's right, engaging a new auditor would require shareholders' approval as stipulated under the Companies Act.

Observers, including fund managers and analysts say while the sudden need for a change of auditors was one issue, which Oilcorp's management has to explain, there was also an issue of integrity at stake.

A foreign analyst said the motion in favour of one accounting firm over the other could leave the “loser” to be perceived as less competent and professional in carrying out its duties in compliance with proper accounting standards of financial reporting.

“You've got to understand. Both parties (accounting firms) have their reputations at stake,” he said.

The foreign analyst said the presumption here is that both accounting firms should have applied similar procedures in accounting practice to derive their reports.

“But why is there a substantial difference in their valuations over the biodiesel plant project in Kuantan?” he said.

To recap, BTMH had refused to amend Oilcorp's annual audited accounts (AAA) for 2007 pertaining to the construction of the biodiesel plant stipulated by the company to be worth RM110mil.

Moreover, the accounting firm refuted Oilcorp's allegations that its action not to issue any AAA would be detrimental to the company's shareholders.

Oilcorp decided to hire Horwarth, another auditing firm, for an independent verification report, which valued the total contract based on two stages of work done, with the first phase valued at RM90mil and additional work at RM20mil.

Interestingly Horwarth, which conducted the independent review on the biodiesel project, was also the current external auditor for Plant Biofuels Corp Sdn Bhd (PBC) and other parties related to the biodiesel plant project.

In a filing to Bursa Malaysia on Friday, Oilcorp said Horwarth had informed the company that it had no professional conflict of interest in taking up the independent verification report.

Oilcorp added that it was puzzling as to why this point was ever raised by BTMH in the first place.

In the latest reply from BTMH, the accounting firm defended its decision not to issue any AAA on the basis that the confirmation letter from PBC dated April 29 confirming the biodiesel contract worth RM110mil was deemed not acceptable as audit evidence.

“We cannot rely on Horwarth’s report as they have not performed an investigation audit report as requested by us,” said BTMH.

Moreover, the accounting firm said during the finalisation of the 2006 audited accounts, the contract of RM90mil was not made available to the auditors.

Otherwise the issue would not have been raised last year.

A senior accountant with a local audit firm said the earlier appointment of Horwarth as PBC auditor and later also hired by Oilcorp to provide an independent verification report on the biodiesel plant might raise some doubts as to how “independent” the verification report was.

“This is especially so if the contracted value in dispute audited by two accounting companies hired by Oilcorp differs substantially for the same project,” he said.

He said at this juncture it was important for shareholders and especially regulators such as the Securities Commission and the relevant authorities to look at this matter closely as the issue had everything to do with transparency, good corporate governance and the integrity of accounting firms.

“We in the accounting fraternity are definitely keen on this landmark case and will be looking at how the issue is interpreted as well as the outcome,” he added.

Source : The Star

Octagon ceburi sektor tenaga hijau

Octagon Consolidated Bhd. (Octagon) yang dulunya hanya dikenali sebagai syarikat cat tetapi kini aktif mengembangkan perniagaannya dalam bidang baru iaitu sektor tenaga hijau.

Pengarah Urusan dan Ketua Pegawai Eksekutifnya, Mazlan Ali berkata, berdasarkan kepada perkembangan memberangsangkan itu, syarikat optimis untuk menjadikan sektor tenaga hijau yang baru diceburi sejak empat tahun lalu sebagai perniagaan terasnya bagi menggantikan sektor saduran perindustrian dan cat.

Octagon menceburi bidang saduran perindustrian dan cat sejak 25 tahun lalu adalah peneraju dalam bidang berkenaan ekoran kejayaannya membekalkan produk kepada pelbagai syarikat multinasional dalam industri elektrik dan elektronik.

Menurut Mazlan, sektor tenaga hijau yang membabitkan operasi menjana tenaga bersih dari sumber tenaga yang diperbaharui itu kini menyumbang kira-kira 10 peratus kepada pendapatan kumpulan manakala bakinya daripada saduran perindustrian dan cat.

''Sektor ini dijangka menjadi perniagaan teras kumpulan menjelang empat tahun akan datang tetapi ini bukan bermakna kami akan meninggalkan perniagaan saduran perindustrian dan cat.

''Sektor perniagaan tersebut tumbuh secara organik tetapi sektor tenaga hijau ini naik begitu mendadak sekali malah permintaan terhadapnya semakin menggalakkan kini,'' katanya kepada Utusan Malaysia, di sini baru-baru ini.

Mazlan menjelaskan, Octagon yang disenaraikan di Papan Utama Bursa Malaysia pada tahun 2002 telah melabur sebanyak RM160 juta untuk sektor tenaga hijau sejak empat tahun yang lalu.

Bagi tempoh berkenaan, pelaburan tersebut dibuat untuk operasi di dalam dan luar negara.

''Kini kami sedang berbincang dengan dua pihak di luar negara untuk melaksanakan projek tenaga hijau dan 10 buah syarikat asing telah berminat terhadap projek tersebut.

''Bagaimanapun, kami akan umumkan secara terperinci dalam tempoh dua bulan akan datang selepas ia dimuktamadkan,'' jelasnya.

Mengenai perkembangan di Malaysia pula, Mazlan berkata, Octagon dijangka melancarkan loji kitar semula tayar terpakai berteknologi tinggi di Pulau Indah, Pelabuhan Klang yang bernilai RM120 juta dalam tempoh sebulan.

Loji yang menggunakan teknologi pirolisis aliran terus itu adalah loji aliran terus pertama di dunia yang mempunyai kapasiti 120 tan atau 12,000 biji tayar terpakai sehari.

Menurutnya, loji berkenaan akan menghasilkan minyak dan gas yang mampu menjana tenaga elektrik.

Mengulas lanjut, minyak yang dihasilkan daripada loji berkenaan akan digunakan untuk kegunaan industri seperti dandang, termasuk kapal korek, manakala baki 10 peratus daripadanya adalah gas yang digunakan untuk menjana tenaga elektrik.

Menurutnya, melalui bahan mentah sebanyak 120 tan tayar terpakai yang diproses di loji tersebut, tenaga elektrik yang dihasilkan secara maksimum adalah dua kilowatt tetapi buat masa ini ia hanya menjana satu kilowatt untuk kegunaan sendiri.

Pelaburan''Kami bercadang untuk mengembangkan lagi projek loji tersebut kepada fasa kedua yang memungkinkan membabitkan pelaburan kira-kira RM120 juta di tempat yang sama pada tahun depan.

''Kapasiti loji itu boleh mencapai sehingga 240 tan tayar terpakai sehari yang mana jumlah tersebut bersamaan dengan 50 peratus daripada tayar terpakai di negara ini yang diperolehi daripada 12.6 juta kenderaan di Malaysia,'' jelasnya.

Menurut Mazlan, berdasarkan kepada perkembangan memberangsangkan itu, Octagon yakin ia akan menyumbang dengan ketara kepada pendapatan syarikat bermula tahun kewangan 2009.

''Malah kami mampu mengeksport kemahiran kami dalam bidang ini kerana syarikat sudah ada loji yang akan beroperasi tidak lama lagi maka model perniagaan itu dapat dibawa ke peringkat antarabangsa dengan mudah dan cekap,'' ujarnya.

Mengenai bidang saduran perindustrian dan cat pula, beliau berkata, Octagon akan terus mengekalkan kedudukannya sebagai peneraju dalam bidang tersebut pada masa kini dan akan datang di pasaran domestik dan rantau Asia Tenggara.

Source : Utusan Malaysia

Ramunia Mahu Jadi Pusat Bagi Fabrikasi Laut Dalam Serantau

Ramunia Holdings Bhd berhasrat menjadi pusat fabrikasi laut dalam serantau.

Pengurus kanan operasinya, Khadrishah Khalid, berkata syarikat itu yakin dapat mencapai visi ini berikutan langkah menaik taraf limbungan dan kemudahannya di Teluk Ramunia, Johor.

"Langkah naik taraf ini adalah sebahagian daripada usaha syarikat untuk meningkatkan kecekapan dan menggunakan kemudahan dengan lebih baik bagi memastikan ia boleh melaksanakan sebarang tugasan laut dalam pada masa akan datang," katanya kepada Bernama semasa lawatan media ke limbungan itu.

Beliau berkata sejak suku ketiga 2006, Ramunia membelanjakan 80 peratus daripada RM200 juta perbelanjaan modalnya bagi menaikkan taraf limbungan itu.

Khadrishah berkata projek dalam tangan syarikat itu kini bernilai RM500 juta dan jumlah itu akan meningkat dengan siapnya kerja-kerja menaik taraf limbungan itu bulan depan.

Beliau berkata syarikat itu akan memberikan tumpuan kepada kerja-kerja kejuruteraan, pemerolehan, penugasan, pemasangan dan pembinaan (EPCIC).

"Kami tidak akan menceburi perniagaan lain kerana kerja-kerja EPICIC menawarkan margin terbesar bagi syarikat itu," katanya.

Tentang penggabungan dengan MISC Bhd, Khadrishah berkata cadangan itu dikemukakan kepada Bursa Malaysia lewat Jun dan kelulusan dijangka diperoleh tidak lama lagi.

Ramunia pada asasnya terlibat dalam perniagaan pembuatan bagi struktur, pembinaan dan penugasan bagi syarikat besar minyak dan gas.

Source : Bernama

Saturday, 19 July 2008

FY2008 Petronas Financial Report

Media Realease 2008

Result Announcement Presantation Slides 2008

Consolidated Figures (USD)

Half Year Figures (RM)

Half Year Figures (USD)

Source : Petronas Group website

Petronas gets greenlight for GLNG

ADELAIDE, AUSTRALIA: Petronas has secured Foreign Investment Review Board approval for its US$2 billion investment in the Gladstone LNG project with Santos Ltd.

Petronas will initially pay oil producer Santos US$2 billion for a 40 percent stake in the LNG project that will be situated along the Queensland coast.

A further US$500 million will be paid to Santos upon reaching a final investment decision for a second LNG production train of a three million tonne (3.3 million ton) a year capacity.

The project is scheduled to enter FEED (front end engineering and design) in late 2008, with final investment decision planned for end 2009. First LNG shipment is expected in 2014.

Source : Energy Current

MMC wins rights to build UAE power plant

MMC Corporation Bhd’s subsidiary MMC Utilities Ltd had obtained exclusive rights to build a power plant in the Emirate of Ajman, UAE, with a potential capacity of up to 1,000 megawatts.

In a statement yesterday, MMC said the agreement, which was signed in Dubai yesterday with the Ajman government, conferred it exclusive rights to conduct feasibility studies on the plant, which is aimed at meeting the rising power demand of new residential and commercial projects.

Once approved, MMC Utilities would establish a concession company that would manage, operate and maintain the plant for 20 years. The Ajman government will commit to purchase the electricity produced throughout the concession period.

“This project marks MMC International’s maiden success in the UAE and is a reflection of MMC’s commitment to expanding our core businesses in the international arena. This project follows our successes in power and water projects in Saudi Arabia, Oman, Jordan and Algeria,” said MMC International chief executive officer Feizal Ali said.

“I’m optimistic that our cross-border investments, such as this power plant project in the UAE, will go a long way towards ensuring sustainable earnings for MMC for many years to come,” added Feizal.

MMC Utilities is a wholly-owned subsidiary of MMC International.

MMC is the joint master developer of the US$30 billion (RM98.1 billion) Jazan Economic City in Saudi Arabia, with the Saudi Binladin Group. MMC International has also invested in a new container terminal at Jeddah Islamic Port.

Source : The Edge

Friday, 18 July 2008

Oil can actually be sold at US$20 a barrel, says Jala

Crude oil price is “commercially viable” to be sold at US$20 (about RM66) a barrel, judging from the existing reserves of oil majors in the world, according to Malaysian Airline System Bhd managing director and chief executive officer Datuk Seri Idris Jala.

The airline chief, who previously worked with Shell for more than 20 years, said the current oil price hovering around US$140 per barrel was “absolutely unfair” to the world economy.

“If you take a look at the oil companies’ portfolios, most of their existing reserves and productions — probably 90% of them — are commercially viable at US$20 per barrel.

“I was kind two months ago when I said the oil price should be US$40 a barrel. I believe that the US$100 on top of the US$40 is actually purely and highly speculative,” he said.

Jala was speaking as one of the panellists at the 2008 Leadership Forum Malaysia here yesterday.

“I don’t blame them. That is the nature of the market. If you have a free market, the speculation instruments are out there. Layers upon layers of speculative instruments are put on top of the real value.

“The question you have to ask is, what is the fair price of crude oil?” he added.

Jala said the world would likely go into recession if oil prices hit US$200 a barrel.

He noted that it would still take a long time for biofuel to be seriously considered as an alternative to fossil fuel.

Earlier at the forum, General Electric Co Southeast Asia president Stuart Dean said: “We talked to oil and gas companies. They don’t believe the price is reasonable. So, it’s truly a speculative aspect. It’s going to correct at some point but we don’t know when.”

Source : The Edge

Petronas still keen on Iran’s LNG project

Petroliam Nasional Bhd (Petronas) is still assessing its liquefied natural gas (LNG) investment in Iran’s South Pars after its partner, French oil firm Total pulled out from the US$11.2 billion (RM36.6 billion) gas project.

Petronas president and chief executive Tan Sri Mohd Hassan Merican said: “We continue to be interested in operating in Iran. I have read the announcement by Total, but Petronas remains interested in the country.”

Petronas said it had yet to make a final investment decision as a result of spiralling costs. “Because of the increase, the economic viability of the project as previously proposed is affected… we also have not completed our discussion with the Iranian government,” Mohd Hassan said.

Asked if Petronas would commence the projects without Total, Mohd Hassan said: “As a company capable of developing LNG projects, we have the technological capabilities as proven in Malaysia and Egypt. But there are other factors, so we have to make an assessment.”

Total, together with Petronas, had planned to develop Phase 11 of the South Pars field to produce LNG.

Total, which holds 40% of the South Pars development, froze its project as it was “too politically risky to invest in Iran at present”, its chief executive Christophe de Margerie said earlier this month. Petronas, which was part of the South Pars consortium, holds 10%.

Iran has the world’s second-largest reserves of natural gas after Russia, and the South Pars field in the Gulf has about 500 trillion cubic feet or 14 trillion cubic metres of gas, representing some 8% of world’s reserves.

Total’s pullout came after Iran’s missile test last week raised political tensions between the country and the West. Other European companies that withdrew from the country included Royal Dutch Shell, Spain’s Repsol and Statiol of Norway.

Petronas’ total LNG production increased to 24.1 million tonnes from 23.3 million tonnes on higher production from its LNG plant in Bintulu. Almost 60% of the Bintulu’s production was exported to Japan, 28% to South Korea and the remaining 12% to Taiwan.

Meanwhile, Mohd Hassan said that the proposed reverse takeover of Ramunia Holdings Bhd would be completed in the fourth quarter this year. MISC Bhd had proposed to sell its subsidiary Malaysia Marine & Heavy Engineering Sdn Bhd (MMHE) to Ramunia for RM3.2 billion via a share swap. Once the takeover is completed, MISC would hold more than 70% in Ramunia.

MISC, a 62% unit of Petronas, is the world’s largest shipper of LNG.

Thursday, 17 July 2008

Malaysia oil and gas outputs rise 3.9 per cent

Malaysia's total average production increased by 3.9 per cent to 1.67 million BOE/d from 1.61 million BOE/d despite maturing fields and increasing cost pressures. Two new oil fields and one gas field, including the Kikeh deepwater project, were brought on stream during the year, increasing the total number of producing fields in Malaysia to 88 fields.

A total of MYR 21.54 billion (US$6.7 billion) was spent in Malaysia's upstream sector during the year, about 12 per cent higher than the previous year's expenditure of MYR 19.24 billion (US$6 billion). Of this, MYR1 2.06 billion (US$3.7 billion), or 56 per cent, was spent on development and production projects, MYR 1.52 billion (US$472 million), or 7.1 per cent, was spent on exploration activities, and the balance was spent on operations.

The country's total reserves, however, declined slightly, as compared to previous year, due to the downward revisions of in gas reserves offshore Sarawak and higher crude and gas production during the year despite additions through new discoveries. Total reserves stood at 20.13 billion BOE as of Jan. 1 2008, down from 20.18 billion BOE the previous year.

Petronas' share of outputs accounted for 69.2 per cent of the total average national production including Petronas Carigali's production.

Source : Energy Current

Wednesday, 16 July 2008

Petronas pays govt RM67.6b in bumper year

Petroliam Nasional Bhd (Petronas) is paying a record RM67.6 billion to the government this year, up from RM52.3 billion previously, its president and chief executive Tan Sri Mohd Hassan Merican said.

Of the total, the federal government gets RM62.8 billion, which includes RM30 billion in dividends, RM6 billion special dividend, RM4.7 billion royalty and RM26 billion in petroleum and corporate taxes. Royalty payments to the state governments of Terengganu, Sabah and Sarawak amount to RM4.8 billion.

“The higher profits have enabled Petronas to provide higher payment to the government. Therefore we have decided to declare a special dividend of RM6 billion to the government this year,” Mohd Hassan said, adding that the special dividend would be paid in phases during the year.

The RM67.6 billion payment represents 63.1% of the RM107.1 billion profit before tax, royalty and export duty at the holding company level. Mohd Hassan said since its incorporation in 1974, Petronas’ payments to the government amounted to RM403.3 billion.

At the group level, the state oil company recorded its best performance in the financial year ended March 31, 2008 (FY08), with a 31.5% jump in net profit to RM61 billion from RM46.4 billion. Group revenue rose 21.2% to RM223.1 billion from RM184.1 billion due to higher crude oil prices and increased revenue contribution from its international operations.

For the first time, overseas operations were the biggest contributor to the group’s revenue, surging 33.1% to RM90 billion, surpassing contributions from the domestic exploration and production (E&P) operations, which rose 7.4% to RM46.3 billion from RM43.1 billion, Mohd Hassan said at its FY08 financial results briefing here yesterday.

Petronas’ export revenue rose 18.3% to RM86.8 billion and accounted for 14% of Malaysia’s total exports.

The national oil company’s earnings were boosted significantly by rising crude oil prices. “Even if there were a correction in crude oil prices, it would not be a sharp one. Assuming that oil trades around US$110 a barrel, Petronas would still stand to gain as a number of their PSC contracts are based on a benchmark of US$40 per barrel of oil and it is not possible that oil would come down to such levels,” an analyst told The Edge Financial Daily.

Crude oil prices on the New York Mercantile Exchange touched US$145.20 at 2.30pm yesterday in electronic trading. Concerns about oil production disruptions in Iran, Nigeria and Brazil, coupled with a weaker US dollar saw oil prices surge to a high of US$147.27 a barrel last Friday.

The rise in crude oil prices had driven up the price of Malaysian Crude Oil (MCO), said Mohd Hassan. The weighted average price of MCO rose to US$86.81 per barrel, up 26.7%. The country’s Tapis oil rose 26.9% to US$87.57 per barrel.

Petronas’ total oil reserves fell 0.5% to 26.37 billion barrels and its reserves replacement ratio (RRR) slipped to 0.9 times during the year to Jan 1, 2008, from 1.8 times previously. Its domestic reserves declined slightly to 20.13 billion barrels from 20.18 billion last year. It replaced its reserves at 0.9 times, from 1.4 times a year earlier.

“The ratio reflects the maturity of our acreages. It also shows that it is more difficult to replace production of resources,” Mohd Hassan said.

Petronas’ entitlement to the country’s oil and gas production rose 3.4% to 744,000 barrels a day of oil equivalent in the year to March 31, 2008 from 719,800 barrels previously. Its domestic share accounted for 44.5% of a daily output of 1.67 million barrels a day.

However, rising costs pushed up Petronas’ capital expenditure (capex) by 33.3% to RM37.6 billion, with some RM20.7 billion or 55.1% of the total directed towards E&P.

Mohd Hassan said that the country’s E&P sector remained vibrant despite increasing challenges and costlier operating environment, and it continued to attract production-sharing contractors (PSC).

“Our PSC terms and conditions are tough and we have not changed the rules of the game… because of the stable geopolitical environment, we continue to generate economic activity in Malaysia,” he said.

On its refining activities, Mohd Hassan said output for the group’s refineries rose to 150.9 million barrels a day from 148.8 million barrels previously. Its three domestic refineries — Petronas Penapisan (Melaka) Sdn Bhd , Petronas Penapisan (Terengganu) Sdn Bhd and Malaysian Refining Company Sdn Bhd — were built with a capacity of 323,300 barrels a day. Utilisation rates at the refineries rose to 91.6% from 91.4% on measures taken to improve efficiencies.

Source : The Edge

Analysts continue to be bullish on Dialog Group Bhd based on its proven ability to replenish its order book

Dialog last week told Bursa Malaysia it had secured two contracts totalling RM132mil from Malaysian Refining Co Sdn Bhd (MRC), a joint-venture company between Petroliam Nasional Bhd and Conoco Asia Ltd, to provide mechanical and maintenance services to its Malacca refinery.

OSK Research estimated in an update report that these contracts would boost Dialog’s current order book to RM1.5bil and contribute to its earnings for the financial year ending Dec 31, 2009.

“We believe the profit margins for these maintenance contracts are better than the margins for a typical engineering, procurement, construction and commissioning project as the latter is normally more sensitive to cost fluctuations, particularly amid the prevailing high steel raw material price environment,” OSK said. It anticipated a gross margin of 10% to 15% from the MRC contracts.

RHB Research said in a report that while the new maintenance contracts were positive for Dialog's earnings, the company remained focused on longer-term recurring income from specialist businesses of advanced catalyst handling and tank terminals.

“However, the maintenance business provides an important inroad for Dialog’s specialist services. For example, we believe the MRC project puts Dialog in a stronger position to provide advanced catalyst handling services to the refinery,” it said.

The bank-backed brokerage foresaw significant organic growth for Dialog over the next two years due to the global expansion of its advanced catalyst handling services to the US and Europe, and its Tanjong Langsat tankage development project.

“In the shorter term, Dialog’s RM1bil-plus contracts will underpin earnings growth,” RHB Research noted.

Technically, the stock is tracing a widening wedge formation. Having recently rebounded from a low of RM1.15, it is however, on the decline again.

Dialog is expected to trade in a choppy manner with current support at RM1.10 with resistance at RM1.40. A break in either direction will likely set its subsequent move.

However, with its overbought/oversold indicators in position of weakness below the neutral line, Dialog is more likely to stay under selling pressure.

OSK said the recent weakness in Dialog's share price provided a good opportunity to accumulate, hence the research house was maintaining its “buy” rating with a target price of RM2.35.

RHB Research maintained its “outperform” recommendation with a target price of RM1.93.

Source : The Star

Tuesday, 15 July 2008

Gas price revision won’t hurt MMC in the short term

The government’s revised gas subsidy is unlikely to affect MMC Corporation Bhd’s associate Gas Malaysia in the short term, according to analysts.

“Although the gas price is reduced for Gas Malaysia’s consumers, we are assuming a similar pass-through to what the company enjoyed previously. As such, Gas Malaysia should still make the same operating profit regardless of the price of gas,” according to OSK Research.

This should provide some relief for MMC which has seen its share price tumble on fears that the newly gazetted windfall tax for independent power producers (IPPs) will eat into the cash flow of its subsidiary and the country’s largest IPP, Malakoff Bhd.

According to MMC’s latest annual report for FY2007, the company’s main revenue source is its energy and utilities segment — which includes its power business and Gas Malaysia — that contributes 75% of group turnover.

“Gas Malaysia has been a significant contributor to MMC all this while and the revised gas prices, while higher, is also less steep. This would mean that a fewer number of consumers would actually look to switch to alternatives,” said an analyst.

However, one caveat is that under the new gas pricing structure, the government is actually looking to reduce the amount of subsidy for natural gas in order to match global prices.

“Noting that gas prices will be increased gradually over 11 years and the slowdown in the global economy over the next two years, we are paring down volume growth for Gas Malaysia from 10% and 8% in FY2009 and FY2010 to 5% and 4% respectively,” said OSK.

MMC’s share price closed at a 12-month low of RM2.30 yesterday.

Last Friday, the government released its revised gas subsidy structure that saw the price of natural gas increasing by a smaller percentage than previously announced. On June 4, the government announced that the price for natural gas would increase between 117.6% and 187.6%.

However, intense lobbying by manufacturers and consumers had prompted the government to delay the implementation of the new gas prices. Now gas is priced 111% higher at RM23.88 per mmbtu (million British thermal units) for industrial players who consume more than two mmscfd (million standard cubic feet per day). For those who use below that benchmark, gas is priced 71.4% higher at RM22.06.

Source : The Edge

Monday, 14 July 2008

Long-term challenge to users of natural gas

MUCH hot air has been expended recently on the anticipated higher prices for natural gas that was finally announced on Friday.

The Economic Planning Unit (EPU) had conceded to industrial users' requests for “a staggered rise” in gas prices, by giving timeframes of 11 years for large industrial users and 13 years for small and medium enterprises (SMEs) for a gradual move to market prices.

Minister in the Prime Minister's Department Tan Sri Amirsham Abdul Aziz, who oversees the EPU, said it was important that the Government supported large industrial users and SMEs. “If we push the timeframe any further, we may find that some industries would not survive,” he said.

The decade-long timeframe, however, may only be a respite from rising natural gas prices as the EPU feels that after 11 to 13 years, industrial users would be exposed to market prices

Petroliam Nasional Bhd (Petronas) had told StarBiz last week prior to the announcement that before 1997, natural gas was supplied to Malaysian customers at market prices indexed to medium fuel oil (MFO).

It was only since May 1997 during the Asian financial crisis that the Government decided that natural gas be sold at a subsidised regulated fixed prices. “So, market prices for gas is not something new for customers in the country,” the spokesman had said.

Some industrial users are not against paying the market rate for gas.

Glovemaker Kossan Rubber Industries Bhd group corporate affairs senior manager Edward Yip said: “We in the industrial sector recognise the need to pay market rates but the rise should be gradual.”

Currently, glove and tile manufacturers are among industrial non-power users of gas in Malaysia.

There also remains the issue of insufficient supply.

According to Petronas estimates, the demand for gas in Peninsular Malaysia has increased by 97% since 1997, which has put a strain on supply facilities.

Petronas had said that its offshore production facilities and the Peninsular Gas Utilisation (PGU) system were running at full capacity to meet increasing demand.

“As our production is unable to meet demand, we have increased the purchase of gas from other sources beyond offshore Terengganu,” a spokesman said.

In 2007, 23% of Peninsular Malaysia's gas demand was met through imports. By Petronas' estimates, demand that already outstrips supply will grow to 4,900mmscf (million standard cubic feet) per day by 2027. Meanwhile, gas supply from offshore Terengganu can only be sustained at 2,000 mmscf per day (see chart).

Amirsham, at Friday's announcement, had said the issue was not the subsidy costs to Petronas, which the national petroleum company could afford, but one of economic viability and sustainability.

“There is not enough gas in any country that you can point to, so it is important we have economic viability (of industries using the gas),” he said.

As such, some sources have said that independent power producers (IPPs), who use up to 60% of natural gas in the country, need to be encouraged to seek other sources of energy.

The Association of Independent Power Producers in Malaysia (Penjanabebas) president Dr Philip Tan said: “Under the purchasing power agreements, Malaysia's IPPs receive all fuel requirements directly from Petronas or TNB Fuel Supplies. At no time are they at liberty to secure their own fuel requirements.”

Petronas, on the other hand, told StarBiz the subsidised prices of gas had hampered the objectives of the National Energy Policy, in particular the Five-Fuel Energy Policy for electricity generation.

The share of gas in the Five-Fuel energy mix policy remains consistently above official targets as compared to the share of other fuel sources, namely oil, coal, hydro and renewable sources, the spokesman said.

Source : The Star

Sunday, 13 July 2008

Kelantan mahu NGV dipasang di stesen minyak di seluruh jajahan

Kelantan meminta kerajaan pusat menyediakan stesen minyak yang menyediakan kemudahan gas asli untuk kenderaan (NGV) di negeri ini seperti terdapat di negeri-negeri pantai barat.

Pengerusi Jawatankuasa Perancangan Ekonomi, Kewangan dan Kebajikan, Datuk Husam Musa berkata, penggunaan gas asli jauh lebih murah berbanding petrol atau diesel.

Oleh itu bagi menjayakan hasrat itu kerajaan negeri akan mengutuskan surat kepada Perdana Menteri, Datuk Seri Abdullah Ahmad Badawi dan Pengerusi Petronas bagi memohon menyediakan kemudahan NGV di Kelantan.

Buat masa sekarang kita belum membincangkannya dengan kerajaan pusat berhubung perkara itu,katanya di sini.

Baru-baru ini Husam mengadakan mengadakan pertemuan dengan beberapa wakil syarikat pembekal dan stesen minyak di sini mengenai cadangan tersebut.

Menurutnya perkara itu dijangka selesai dalam tempoh dua atau tiga bulan selepas mendapat persetujuan kerajaan pusat.

Menurutnya pihak terbabit hanya perlu membekalkan bahan api itu sahaja, manakala kemudahan lain termasuk pam, pembekalan tiub NGV, setor dan pengangkutan akan diurus kerajaan negeri.

Dalam perkembangan lain beliau berkata, kerajaan negeri bercadang menerokai penggunaan kuasa solar dan bebaling angin dalam usaha menjimatkan penggunaan elektrik untuk rakyat.

Menurut beliau sekiranya berjaya ia akan dimulakan di kawasan pedalaman.

Selain itu cadangan penggunaan tenaga solar akan diterokai kerajaan negeri untuk diaplikasikan sepenuhnya di kampung-kampung sebelum ia digunakan secara meluas di tempat-tempat lain.

Penggunaan bebaling angin juga boleh dicuba kerana kini kita perlu mencari peluang menggunakan teknologi yang mampu menjimatkan kos, ujarnya.

Menurutnya pemasangan peralatan menggunakan tenaga solar diakui mahal, bagaimanapun dengan pembangunan teknologi yang semakin canggih kosnya kini sudah berkurangan.

Oleh itu, katanya kerajaan perlu merancang penggunaan tenaga yang lebih canggih seiring dengan perkembangan teknolgi moden bagi manfaat rakyat.

Source : Harakah

Saturday, 12 July 2008

Iran confirms Total's withdrawal from gas project

Iran's oil minister confirmed that French energy giant Total has dropped out of a multi-billion-dollar gas investment in the Islamic republic, the state broadcaster reported.

"In our eye Total is considered out," Gholam Hossein Nozari was quoted as saying on the state broadcaster's website.

"Total's recent move in withdrawing from phase 11 of the South Pars is a completely political move and not a commercial one," Nozari said.

"As soon as we heard this news we started work on this phase with power and will continue powerfully," he added.

The French firm's chief Christophe de Margerie said in an interview published on Thursday that it was too politically risky to invest in Iran at present.

Total, with its expertise, was to develop phase 11 of Iran's giant South Pars gas field to produce liquefied natural gas (LNG) alongside Malaysia's Petronas.

Iranian energy officials had repeatedly said they would go ahead with the phase 11 gas project -- even if they had to abandon the idea of producing LNG -- with other foreign or domestic firms.

Iran has the world's second-largest reserves of natural gas.

The South Pars field in the Gulf has around 500 trillion cubic feet (14 trillion cubic metres) of gas, which represents about eight percent of world reserves.

Iran shares the wider Pars fields with Qatar on the other side of the Gulf.

The development of Iran's giant offshore field has been delayed amid a lack of investment in a country faced with severe gas needs of its own in winter at the same time as planning ambitious gas export projects to Asia and Europe.

Western governments have pressured firms to cut their ties with Iran over the country's controversial nuclear programme, which world powers fear could be aimed at seeking atomic weapons -- a charge vehemently denied by Tehran.

Tensions over the nuclear standoff have surged this week after Iran test-fired a broadside of missiles -- including one it says brings Israel within range -- in war games that provoked international concern.

Source : AFP

Titan Chemicals appoints Wilder new managing director

Titan Chemicals Corp Bhd has appointed American Warren William Wilder as its new managing director to replace Thomas Patrick Grehl, who stepped down three days ago but remained as a senior advisor to the company.

In a statement yesterday, Titan said Wilder was previously senior vice president (Olefins) of Westlake Chemical Corporation, where he was responsible for the leadership and strategy of the US$2 billion revenue business. He was also directly responsible for leading its manufacturing, global procurement, marketing and sales operations. He had also worked for Exxon and Kock Industries.

With more than 20 years experience in refining and chemical manufacturing, technology, sales and marketing, corporate finance, feedstock procurement and supply chain management, Wilder is also a director of Nasdaq-listed ICO Inc and a member of the chemical sub-committee of the US National Petrochemical and Refining Association.

“Titan Chemicals is well positioned to face the challenges in our industry. There are business opportunities in the region which are very attractive,” Wilder said in the statement.

Friday, 11 July 2008

Titan Chemicals MD resigns

Thomas Patrick Grehl has resigned as Titan Chemicals Corp Bhd’s managing director.

Titan Chemicals said in a statement yesterday that Grehl, however, would continue as a senior adviser to the company.

Grehl owns about one million shares in Titan Chemicals.

Thursday, 10 July 2008

Ahmadinejad speaks out on oil and war

Kuala Lumpur - Iran's president has blamed the West for artificially raising crude oil prices, and dismissed fears that Israel and the US could be preparing to attack his country as a "funny joke."

President Mahmoud Ahmadinejad, on a visit to Malaysia, told a news conference on Tuesday that the global production of oil is much more than consumption, suggesting economics are not behind today's record-high prices.

"So it is very clear and obvious that the market does not have a role in raising prices. There are some others that are determining the oil price for the benefit of the few, very rich people of the world," he said.

Ahmadinejad criticised Iran's arch foe, the United States, in every answer. He blamed Washington for the world economic crisis and maintaining a nuclear weapons stockpile while opposing Tehran's "peaceful" nuclear program.

He also questioned the United States' permanent membership in the UN Security Council, its occupation of Iraq, and held it responsible for illegal drug production in Afghanistan.

Ahmadinejad said the high oil prices - which are hovering around $140 a barrel - are the result of a weak dollar and a deliberate decision by the United States and some European countries to profit from high fuel taxes. In some European countries, 70 percent of the fuel cost goes to governments as tax, he said.

"The meaning of this is that the revenue of these countries is much higher than countries that produce and export crude oil," said Ahmadinejad, whose country is the second biggest producer in the Organization of Petroleum Exporting Countries.

He claimed that the US can also use the "artificially high price of crude oil" as a justification to start politically-sensitive exploration in the North Pole.

Predictably, Ahmadinejad took potshots at US President George Bush, but expressed hope that the next administration will rebuild American's reputation in the eyes of the world.

"Today, the government of the United States is on the threshold of bankruptcy - from political to economic," he said, speaking through an interpreter.

Iran's animosity with the United States and Israel stems from its nuclear program. Tehran insists it is only for peaceful purposes, such as energy production. But the Bush administration believes it is for making nuclear weapons. Although Washington says it prefers a diplomatic resolution to the standoff, the US and Israel have not ruled out a military option.

Ahmadinejad said the two countries were "focusing on propaganda and psychological war."

"Before, it would be considered as a serious issue," he said. But Iranians are so used to the threats that they now treat it as a "very funny show...These type of wars are considered as a funny joke."

He added, "I assure you that there won't be any war in the future."

Asked to clarify his previous calls for the destruction of Israel, Ahmadinejad gave a long and convoluted reply, saying he has nothing against Jews, but only against the "Zionists" who rule Israel.

He predicted that Israel's "Zionist regime" would collapse without the need for any Iranian action. - Sapa-AP

Tuesday, 8 July 2008

Gulf Petroleum to start work on RM16.5b oil complex by year-end

KUALA LUMPUR: Qatar-based Gulf Petroleum Ltd hopes to commence the construction of the proposed integrated oil and gas complex in Perak by year-end.

In a statement yesterday, Gulf Petroleum said it had appointed a top international energy consultant to conduct the final feasibility study on the project after the tender and bidding process to select the consultant ended last week. The study would be completed within eight weeks.

"To date, our plans in Malaysia are still on track. If everything falls into place we should be able to commence construction by the end of this year," its director Nor Azmi Abdullah said.

The oil and gas complex comprises an oil refinery, a petrochemical project and storage facilities with an initial investment of about US$5 billion (RM16.5 billion) for the first phase of five years. It would be constructed on a 400-hectare site allocated to Gulf Petroleum from Perak state government.

Gulf Petroleum Ltd received a letter of approval by the Ministry of International Trade and Industry issued on April 25 to build the integrated oil and gas complex in Perak. The integrated complex would be Gulf Petroleum's regional hub for its activities in the Asia-Pacific region.

The target capacity of the proposed refinery is between 100,000 and 150,000 barrels per day for the first five years.

In April, the company's president Abdulaziz Hamad Al-Delaimi was quoted as saying that at least two national oil companies wholly owned by the Middle East governments would participate in the project along with other major oil and gas groups, prominent banking and insurance groups.

Gulf Petroleum's shareholders include members of the Qatar royal family, Qatar General Insurance & Reinsurance, conglomerate Al-Mana Group, National Petroleum Services and the banking group of Al-Sari.

Source (Edited) : The Edge

Gulf Petroleum appoints consultant

PETALING JAYA: Qatar’s Gulf Petroleum Ltd (WLL) has appointed a top international energy consultant to undertake a final feasibility study for its proposed integrated oil and gas complex in Malaysia, with an initial investment of about US$5bil (RM16bil).

It said yesterday the selection was made after the tender and bidding process that ended last week. The consultant was expected to complete the final feasibility study within eight weeks.

Gulf Petroleum obtained Malaysia’s regulatory approval in April for its proposed integrated oil and gas complex comprising an oil refinery, petrochemical project and storage facilities with an initial investments of about US$5bil for the first phase of five year.

The integrated complex would be Gulf Petroleum’s regional hub for its activities in the Asia Pacific region.
“As of to date, our plans in Malaysia are still on track. If everything falls into place, we should be able to commence construction by end of this year” said a director of Gulf Petroleum, Nor Azmi Abdullah.

Source : The Star

Monday, 7 July 2008

Petronas has never made any losses in commercial ventures, says PM

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) has never made any losses in any commercial ventures that the national oil company has embarked upon, said Prime Minister Datuk Seri Abdullah Ahmad Badawi.

In his written reply at the Dewan Rakyat yesterday to Lim Kit Siang (Ipoh Timur-DAP), who had asked Petronas to list out five projects in which it had suffered major losses, also said Petronas had also undertaken non-commercial projects aimed at boosting nation-building.

Among such projects is Universiti Technologi Petronas (UTP) in Tronoh, Perak, which was established in 1997 specialising in engineering and information technology. The university incurs an operation cost of RM150 million per year and has produced 3,400 graduates to date.

Petronas had also established the Institut Teknologi Petroleum Petronas (INSTEP) in Bukit Rakit, Terengganu where it trains technicians for the oil and gas sector. Established in 1983, it has an annual operation cost of RM80 million.

Its other project is Petronas NGV Sdn Bhd, which owns 90 stations with NGV facilities and has plans to increase the number of stations to 200 by 2010. Established in 1992, the NGV is sold at 68 sen per litre and Petronas has forked out RM500 million in subsidies.

To another question by Fong Kui Lun (Bukit Bintang-DAP), Abdullah said the national oil reserve on Jan 1, 2007 was at 5.4 billion barrel, with an average output of 666,000 barrels per day for the financial year ended March 31, 2007. The Malaysian crude oil was priced at US$68.50 per barrel in the same financial year.

Source : The Edge

Iran rejects Malaysia’s proposal to discuss oil price

KUALA LUMPUR: Iran has poured cold water on Malaysia’s proposal to discuss the rising oil prices at the Developing Eight Summit on Tuesday.

Iranian D8 Commissioner Suleiman Pour said the Organisation of the Petroleum Exporting Countries (Opec) was the appropriate forum to discuss the soaring crude oil prices and not the D8.

Opec is another organisation and D8 is the economic organisation to enhance economic cooperation among member states,” Bernama quoted him as saying on the sidelines of theD8 commissioners’ meeting yesterday.

Foreign Minister Datuk Seri Rais Yatim said Kuala Lumpur was hoping for a more active participation among member countries, particularly to talk on the spiralling costs of food and fuel.

Contacted by The Star yesterday Rais said Malaysia was committed to ensure D8 remained relevant amid the global economic challenges.

D8 foreign ministers will meet today to map out issues for discussion for their leaders.

He also said over the next few days, the grouping would have to chart its future in view of recent global developments, particularly their role under the canopy of the Organisation of Islamic Conference.

“We need to chart the parameters of D8 and how far member countries are willing to play their part in making the grouping a success,” he added.

Malaysia is taking over the D8 chairmanship from Indonesia.

The grouping, comprising developing Muslim nations – Bangladesh, Egypt, Indonesia, Iran, Nigeria, Pakistan, Turkey and Malaysia – was formed as a mechanism for development co-operation and to act as a catalyst towards fostering tangible and substantive economic co-operation among Muslim countries.

Rais said the D8 might be small and still in its “childhood years” compared to groupings like the OIC, Asean, the G8 and G15. Nevertheless, enthusiasm should be as keen.

Rais said another crucial matter that D8 members need to look into was the issue of finance to ensure the administrative running of the grouping would not come to an abrupt halt.

Outgoing D8 secretary-general Dipo Alam was quoted as saying the grouping would be financially exhausted soon if no financial aid was given by member states.

Source : The Star

Sunday, 6 July 2008

Kelantan aims to be natural gas vehicle hub

KOTA BARU: Kelantan wants to turn the state into a hub for natural gas vehicles (NGV).

State Finance Planning committee chairman Datuk Husam Musa said that petroleum companies which fitted NGV kits should provide an instalment package to make NGV affordable to users.

Discussions will be held with petroleum companies here on Thursday to kick-start the plan.

Kelantan is even open to foreign fuel firms setting up the necessary infrastructure to make natural gas (NG) available to road users here.

“We will discuss how to provide monthly instalment payment schemes for civil servants, public transport operators and private sector workers who install the NGV kits, Husam said after presenting RM10,000 aid to the state hired cars and taxi association here.

Earlier it was reported that in a move to promote NGV, Kelantan plans to grant exclusive rights to any petroleum company keen on investing in the infrastructure to supply NG on a commercial basis. That offer, extended also to national oil corporation Petronas, still stands.

Storage and supply facilities throughout the state, including a pipeline to ensure safe delivery of NG to areas selected for dispensing it, will be brought up during the discussions, Husam said.

NGV has been identified as the main solution to arrest the escalating price of global fossil fuels and reduce the cost of transportation both in the public and private sectors, he said.

On the recent increase in petrol and diesel prices, Husam claimed that the Federal Government had made a political decision and not an economic one.

Source : The Star

Friday, 4 July 2008

Tanjung Offshore secures contracts

KUALA LUMPUR: Tanjung Offshore Bhd subsidiary, Tanjung Offshore Services Sdn Bhd, has won contracts with a total charter value of RM185 million from Petronas Carigali Sdn Bhd for the provision of four offshore support vessels.

In a statement yesterday, Tanjung said the vessels would facilitate Petronas Carigali’s domestic drilling operations on a long term basis of up to four years from August and September 2008.

Source : The Edge

Thursday, 3 July 2008

Petra Perdana ventures into south Asia-Pacific region

KUALA LUMPUR: Petra Perdana Bhd has formed a joint venture to operate offshore oil and gas (O&G) marine services in the southern Asia-Pacific region, in particular Australia and New Zealand.

In a statement yesterday, Petra Perdana said it had signed a JV company shareholders’ agreement with The Underwater Centre Fremantle Pty Ltd (TUCF) of Western Australia, Siliqua Pty Ltd as trustee for CJES Trust (CJES) of Victoria, Australia and the JV company Petra Marine Australia Pty Ltd (PMA) to market, manage and operate the services in the region.

TUCF, a marine operator and diving services contractor, will provide operational foundation necessary to ensure the development of the JV’s marine operations, while CJES will provide marketing and network opportunities within the Australian/New Zealand sector of the offshore marine market.

PMA, which has a paid-up capital of A$500,000 (RM1.58 million) comprising 500,000 shares of A$1 each, will market, manage and operate the vessels in the Australia and New Zealand offshore oil and gas regions, including any joint-development area. PMA’s role will also cover other countries to be mutually agreed upon by the parties.

Petra Perdana holds a 55% stake in PMA while TUCF and CJES hold 25% and 20%, respectively.

Petra Perdana executive chairman and chief executive officer Tengku Datuk Ibrahim Petra said the strong business synergies of Petra Perdana, TUCF and CJES had prompted the JV and formation of PMA, which started business operations on Monday.

“By capitalising on the strengths of our JV partners and penetrating into new and developing market segments in Australia and New Zealand, (this) would enable Petra Perdana to achieve its long-term growth prospects in offshore marine services.

“The prospects of PMA in offshore marine services are positive and bright given the high level and growing number of offshore exploration and development drilling activities by large O&G majors in the Australian/New Zealand markets. The market also provides growing opportunities for marine support work in offshore construction and installation projects,” Tengku Ibrahim said.

Source : The Edge