Friday, 22 August 2008

KNM close to acquiring Brazilian firms

Oil and gas services company KNM Group Bhd entered into three sale and purchase agreements to buy 80% stakes in Brazilian companies HZM Industrial Ltda, HZM Servicos Ltda and HZM S A Industria e Comercio de Equipmentos for a total of RM55.3 million cash.

KNM first announced its intention to acquire stakes in the Brazilian companies last December but asked for an extension earlier this month.

The acquisition is being concluded via two of its wholly-owned units, KNM International Sdn Bhd and KNM Process Systems Sdn Bhd, taking over the equity from three individuals — Joao Ronaldo Pereira, Jose Maria Vieira de Novaes and Rozimiro Ferreira Lopes.

The three companies specialise in areas such as fabrication of steel structures, pressure vessels and stainless steel plates for engineering, procurement and construction contracts, and assembly, erection and maintenance of industrial plants.
“The proposed acquisition will allow KNM to enhance its presence through the design and manufacturing of process equipment for the oil, gas, petrochemicals and minerals mining industries, and enables KNM to have immediate manufacturing capacity in Brazil, access to clients in the oil, gas, petrochemicals and minerals mining industry and enhance its presence in South America,” KNM said in an announcement.

The acquisition is expected to contribute positively to KNM’s earnings for FY2008. The vendor’s original cost and dates of investment in HZM are not publicly available.

For the first three months of FY2008, KNM posted a 41% jump in net profit to RM54.1 million on the back of a 26% rise in revenue to RM331.2 million, compared to a year earlier.

KNM’s shares had been actively traded over the past few days. Yesterday, the stock closed at RM1.55, a gain of nine sen, with 2.3 million shares changing hands.

Overseas ambition

VASTALUX Energy Bhd (VEB), which is en route to a listing, plans to expand its oil and gas-related business in the Philippines, India and Myanmar as well as the Middle East and North African regions from next year.

Its executive director Azman Abd Ghafar said the company is looking at Qatar, Oman and Saudi Arabia in the Middle East and Libya in North Africa.

"We expect our international business to contribute significantly to revenue. It is still too early to see much impact since we just started our overseas business last year.

"Our aim is to become a preferred engineering company for oil and gas and petrochemicals in the region," he told Business Times in an interview.

VEB, incorporated in 1995, has been making inroads into Indonesia and Vietnam.

Its Indonesian subsidiary, PT Vastalux Energy, secured its first job in February this year to instal a gas pipeline for the Greater Jakarta Distribution main line.

In May, it secured another contract to procure steel products and pipes in Indonesia.

In Vietnam, Vastalux Sdn Bhd has entered into a 10-year contract with Swedish MacGregor Oy and Alpha Co Ltd for the fabrication of steel products, specifically hatch covers.

Azman said VEB and Alpha also plan to form a joint-venture company to undertake offshore and onshore oil and gas supporting services, including fabrication operations, hook-up and commissioning, topside maintenance and underwater structural inspection.

VEB hopes to list on the second board of Bursa Malaysia next month. Its prospectus will be launched today.

Its initial public offering (IPO) involves the issuance of 57.23 million new shares, an offer for sale of 26 million shares and a restricted offer of seven million shares.

Azman said the company expects to raise some RM52 million from the IPO, of which 20 per cent will be used for its acquisition of at least two vessels, 40 per cent to repay loans and the rest for working capital.

He said the oil and gas sector still offers great potential, adding that VEB's strong track record of continuous growth holds the promise of good returns for investors.

Azman noted that in terms of revenue, VEB is ranked ninth out of 20 players in Malaysia. It posted RM143.23 million revenue last year.

The company is bidding for contracts worth close to RM750 million in the country, Azman said.

"Of this, 15-20 per cent are onshore jobs and the rest offshore," he added.

VEB's secured order book stands at RM900 million. Forty per cent has been completed, while the balance will last the company until 2010.

Its main customers include Petronas Carigali Sdn Bhd, Murphy Sarawak Oil Co Ltd and Malaysian Refining Co Sdn Bhd.

VEB operates three fabrication yards in Kemaman, Terengganu; Bintulu, Sarawak; and Labuan.

"We are developing our fourth fabrication yard in Teluk Kalong, Terengganu. We are spending some RM6 million on the yard, which is expected to be completed by the middle of next year," Azman said.

Thursday, 21 August 2008

Tanjung Offshore lands RM50m job from Murphy

Tanjung Offshore Bhd has secured a RM50 million contract to provide operations and maintenance support services for Murphy Sarawak Oil Ltd's oil and gas production operations in the country over a four-year period from August 2008.

The contract, awarded to its subsidiary Tanjung Offshore Services Sdn Bhd on Aug 14, would contribute positively to Tanjung's earnings and net assets for the financial years ending Dec 31, 2008 to 2012, the company told Bursa Malaysia yesterday.

Thursday, 7 August 2008

KNM bags RM463m worth of orders

KNM Group Bhd has secured overseas and local oil and gas-related orders totalling RM463 million from international clients.

In a statement yesterday, KNM said its wholly-owned subsidiary KNM Process Systems Sdn Bhd and its indirect wholly-owned subsidiaries FBM Hudson Italiana SpA and HEA Australia Pty Ltd had secured orders from Canada, New Caledonia, Algeria, Portugal, the United Arab Emirates, Egypt and Australia.

Those orders include providing refrigeration/demethanisers/deethanisers for the Skikda New LNG project in Algeria, plate heat exchangers for the Tangga Barat Cluster Development project from Petronas Carigali Sdn Bhd and plates for precipitation tanks for the Worsley Efficiency and Growth project in Australia.

It added that the orders from Canada such as the modularisation of DSU heaters and FSU settlers and high-pressure slop drums were the first projects to be undertaken at its new manufacturing plant in Tofield, Alberta in Canada.

KNM said the orders were expected to contribute positively to its earnings and net tangible assets for the financial years ending Dec 31, 2008 and 2009.

Source : The Edge

Tuesday, 5 August 2008

New shareholders control 20% of Kejuruteraan Samudra Timur

A group of new shareholders at oil and gas company Kejuruteraan Samudra Timur Bhd (KSTB) has amassed about 20% equity in the company, shareholding changes to Bursa Malaysia show.

The new group, linked to security company Safeguards Corp Bhd, control vehicles such as Virtual Sphere Sdn Bhd, Trance Equity Sdn Bhd and Central Portfolio Sdn Bhd, which collectively have about 20% equity in KSTB.

Privately held Virtual Sphere has 7.9% equity in KSTB. Virtual Sphere’s shareholders are Green Bondage Sdn Bhd, Wong Chiew Har and Lee Fong Chor.

Green Bondage has 80% equity in Virtual Sphere. Green Bondage’s shareholders include Lisa Khong May May and Lee Fong Chor, while its board includes Leong Chee Keong, who was appointed to KSTB’s board in November last year. Leong is also the chief executive of haulage and transportation company Safeguards Oceanic Holdings Sdn Bhd, in which Safeguards has 60% equity.

Virtual Sphere made an announcement of its substantial shareholding at the end of July, as did another company, Trance Equity, which announced a substantial stake of 7.2% in KSTB.

Trance Equity’s shareholders are once again Khong and Lee and one Mohd Yusuf Nurin. Mohd Yusuf was also a director of Safeguards.

According to KSTB’s annual report, another company, Central Portfolio Sdn Bhd has about 4.9% equity in KSTB.

Source : The Edge

Monday, 4 August 2008

Petronas unit buys more African assets

The acquisition of Shell's downstream business in Lesotho and Zimbabwe by Engen will provide it with an additional 200 million litres of refined petroleum products a year, says an Engen spokesperson

ENGEN Petroleum Ltd, an 80 per cent unit of Petroliam Nasional Bhd (Petronas), is buying the Royal Dutch Shell's downstream business interests in Lesotho and Zimbabwe, fuelling the South African energy company towards realising its vision to become an African champion by 2016.

Currently, the company operates retail and other commercial downstream businesses in 15 countries, while its parent company, Petronas, has interests in some 13 countries in the African continent.

An Engen spokesperson said the acquisition of Shell's downstream business interests in Lesotho and Zimbabwe will provide the company an additional 200 million litres of refined petroleum products a year, and push up its market share in Lesotho to 35 per cent.

"The Lesotho and Zimbabwean markets will make a significant contribution to Engen's vision of becoming an African champion in downstream business by 2016," the spokesperson told Business Times.

According to a statement posted on Engen's website, the company and Shell signed a sale and purchase agreement early July, but the deal is still subject to regulatory approval from the countries' governments and central banks.

In the case of Zimbabwe, the spokesman said the deal is subject to pre-emptive rights.

A Shell official, who confirmed the sale of the group's business interests in Lesotho and Zimbabwe, said the move is consistent with its global strategy known as "more upstream and profitable downstream".

However, the official said Shell remains committed to its downstream business in Africa and is seeking to focus its portfolio on markets where it can deliver maximum value for customers and shareholders.

For Zimbabwe, the official said, Shell's interests in that country were a non-consolidated joint venture covering 50 per cent of Shell Zimbabwe and 50 per cent of BP Zimbabwe, a 50-50 joint venture operated by BP.

"Shell has licensed its brand to the joint venture, therefore half of the retail network is Shell-branded. This joint venture sells 172 million litres of retail and commercial fuels, lubricants and aviation products, mainly through retail sites," the official said.

Elaborating, Engen's spokesman said its Lesotho operation currently boasts annual volumes of 36 million litres of fuel through seven retail sites, and via commercial and lubricant arrangements, for just under 21 per cent of the market.

"Engen already has interests in Lesotho, and the acquisition will see it secure 35 per cent of the market," the spokesman said.

In the case of Zimbabwe, the spokesman said Shell's Zimbabwe business, run in a joint venture with BP as the manager, sells 172 million litres of retail and commercial fuels, lubricants and aviation products, through 226 retail sites and other arrangements.

"While Zimbabwe's economy has declined sharply over the last decade, it still has good infrastructure which could form the basis of renewed economic growth, once the political crisis is resolved," the spokesman said.

The spokesman explained that under the proposed acquisition, Engen's Zimbabwe holding will be in a 50-50 joint-partnership form.

Besides Petronas' share, the remaining 20 per cent stake in Engen is held by Worldwide African Investment Holdings (Pty) Ltd.

Petronas' interest in Engen encompasses a refinery in Durban and more than 1,300 service stations across Africa.

Source : Business Times

UMW to set up O&G fabrication yard in Lumut

UMW Holdings Bhd is acquiring three parcels of leasehold land measuring a total of 24.56 acres in Lumut, Perak, for RM40 million for the development of an oil and gas fabrication yard.

In a statement yesterday, UMW said its JV company UMW Fabritech Sdn Bhd (UFSB) had entered into two separate sale and purchase agreements with Pro-Expert Sdn Bhd for the land.

UFSB, formed between UMW and DKLS Industries Bhd, was set up to undertake the fabrication of oil and gas offshore structures in Malaysia.

UMW said the new construction and fabrication facility in Lumut was expected to further strengthen UMW’s growing reputation as a leading provider of ancillary products and services to the oil and gas industry in the region.

Source : The Edge

Sunday, 3 August 2008

Shell developing cutting-edge green technologies

GLOBAL energy company, Shell, is rigorously developing cutting-edge technology to meet increasing challenges in the sector.

Shell Global Solutions, for one is developing innovations to promote efficient use and reduction of carbon emissions around the world.

While the emissions of greenhouse gases may not be totally eradicated but the worst impacts of climate change can be substantially reduced if their levels in the atmosphere can be stabilised at between 450 and 550ppm (parts per million) C02 equivalent.

The current level is 430ppm C02, and it is rising at more than 2ppm each year. Stabilisation at this range would require emissions to be at least 25 per cent below current levels by 2050, and more in the future.

Regional head of Carbon and Energy Management of Asia Pacific Shell Global Solutions, Dr Ir Oscar Piepers said in a recent paper that the group is pursuing several C02 mitigation and technology development activities to improve management of C02 emissions from its hydrocarbon businesses.

Activities include energy efficiency projects, potential large-scale C02 sequestration demonstration projects and alternative fuels.

The International Energy Agency has forecast energy demand to rise by 50 per cent over the first 30 years of this century and believes that most of this increase will be met by hydrocarbons.

The ability to manage C02 is therefore a vital for the future development and growth of businesses.

Piepers said Shell launched an initiative several years ago to improve the energy efficiencies of refineries and chemical plants.

The energy efficiency programme being undertaken at the liquefied natural gas plant in Malaysia is an example.

Malaysia LNG expects an overall LNG production increase of up to one per cent as a result of improvements made with minimal capital expenditure.

Shell Global Solutions' tailored energy-efficiency programme was originally designed for refineries; this was its first implementation at an LNG facility in Malaysia.

The programme can be used across a wide range of industries and is particularly appropriate for energy-intensive businesses.

The energy efficiency programme is helping Shell facilities and plants to cut energy consumption, reduce emissions and is being implemented by clients in the manufacturing and processing industries.

In 2004, the Deer Park chemical complex in Texas, US, reduced its energy consumption by 2.1 per cent to give annual savings of 90,000 tons of associated C02 emissions.

"Typically, we see most savings made in our energy efficiency programmes are through the effective application of successful practices, technology and economics. For example, capturing carbon dioxide means it can be stored (sequestered). This comes at a cost. However, there are novel ways you can recycle carbon dioxide," Piepers said.

For instance, the Shell Pernis refinery in The Netherlands is capturing part of the carbon dioxide it produces and provides it to a third party who then supplies it for horticultural use.

Shell is also developing a number of alternative energy sources, and is the largest distributor of bio-fuels and one of the biggest investors in wind energy, investing in new technology such as second generation biofuels, thin film solar and hydrogen.

Source : Business Times

Friday, 1 August 2008

Dayang in talks on maiden acquisition

DAYANG Enterprise Holdings Bhd is in talks for its maiden purchase, a local company involved in niche product fabrication and installation for the oil and gas industry.

Dayang, which provides oil rig maintenance and marine charter, may take a controlling stake or buy all of the company's shares, managing director Tengku Yusof Tengku Ahmad Shahruddin said.

"We have been talking since June. The company wants to grow its business and needs funding. If the price is right and it can complement Dayang, we will buy it by early next year," Tengku Yusof told Business Times at a briefing in Kuala Lumpur yesterday.

Tengku Yusof said Dayang will probably invest less than RM50 million for the purchase and it will be a profitable venture.

At the briefing, Tengku Yusof said that Dayang, which owns four workboats and a supply boat, may expand its chartering business by buying more vessels.

It has long-term charters with Petronas Carigali Sdn Bhd for its first three vessels until 2010.

The fourth vessel, Dayang Nilam, worth RM22 million, is being upgraded and will start operations from August. The fifth vessel, Dayang Zamrud, worth RM51.5 million, will be delivered by mid-2009.

"Long-term charter rates range from RM50,000 to RM100,000 a day. It's a good business. We are buying also to reduce third-party dependency," he said.

Dayang is optimistic of achieving 15 per cent growth in revenue and net profit for financial year 2009, based on current projects, new jobs it hopes to get, and charter contracts for its two new vessels.

Dayang has bid for RM1 billion worth of contracts from Talisman, Petronas Carigali and US-based Murphy Oil in the last three months.

The company hopes to get at least 30 per cent of the jobs, which will keep it busy for two to three years.

"We will know the results for some of the contracts by the end of this year," Tengku Yusof said.

Source : Business Times

Shell profit surge 33 pc

Anglo-Dutch energy giant Royal Dutch Shell said yesterday that net profit jumped by a third to US$11.56 billion dollars (7.41 billion euros) in the second quarter owing to record high oil prices.

Net earnings, excluding fluctuations in the value of inventories, rose five per cent to 7.9 billion dollars in the three months to the end of June, compared with the same period of 2007, Shell added in a results statement.

Production fell 1.6 per cent during the reporting period to 3.13 million barrels of oil equivalent per day, with output hit by unrest at facilities in Nigeria.

Europe’s biggest oil company said its income jumped by 55 per cent to 131.42 billion dollars during the second quarter.

Energy majors like Shell were boosted by rocketing world oil prices that scaled record heights in the period and struck historic peaks above US$147 per barrel earlier this month.

“This is another set of competitive earnings for Shell shareholders,” said chief executive Jeroen van der Veer in comments accompanying the earnings release.

“Good operating performance, combined with increased oil and gas prices, offset the impact of weaker downstream conditions in the second quarter 2008.

“Shell is making substantial, targeted investments to grow the company for shareholders and help ensure that energy markets remain well supplied.” Investors welcomed the results, sending Shell’s ’B’ shares 0.94 per cent higher to 1,822 pence in morning trade on London’s FTSE 100 index, which was down 0.29 per cent at 5,405.20 points.

Royal Dutch Shell is the world’s second biggest energy company in terms of stock market capitalisation behind number one ExxonMobil.

BP, the third largest, said yesterday that its net profit leapt 28 per cent to US$9.47 billion in the second quarter.

Crude futures have spiked to a series of record highs this year as the dollar weakened, and amid geopolitical worries about key oil exporters Iran and Nigeria.

Oil prices hit a record high of US147.50 per barrel at the start of the third quarter, on July 11.

They have since fallen heavily on concerns that the global economic slowdown will weigh on energy demand, particularly in key consumer the United States.

At the same time, production outages in Nigeria have slashed Shell’s output from the African country.

On Tuesday, Shell said it was suspending some crude deliveries after militants sabotaged a pipeline in Nigeria.

The firm warned it may not be able to meet some supply contracts at its major Bonny terminal before the end of September.

Shell’s move followed an attack last Monday by rebels from the Movement for the Emancipation of the Niger Delta (MEND) on Shell pipelines in southern Rivers state, Nigeria’s main oil producing region.

The past two years have seen an upsurge in violent attacks by armed gangs in the Niger Delta, cutting Nigeria’s output of 2.6 million barrels per day of crude by a quarter.

Source : AFP

Exxon posts record profit again

Exxon Mobil Corp said yesterday soaring oil prices pushed its second-quarter earnings up 14 per cent, again breaking its own record for the highest-ever profit by a US company.

Net income in the quarter rose to US$11.68 billion, or US$2.22 a share, from US$10.26 billion, or US$1.83 a share, last year. Exxon both produces oil and refines it to make gasoline, and profit margins for gasoline were weak during the quarter, holding back earnings slightly.

US oil prices averaged slightly less than US$125 a barrel in the quarter, nearly double prices from a year earlier.

Source : Reuters