Puncak Niaga Holdings Bhd plans to have its oil and gas (O&G) division contribute about 60% of the group’s revenue within the next five years, overtaking its core water business.
Puncak Niaga chairman Tan Sri Rozali Ismail said the company would spend US$59 million (RM179.2 million) to acquire two O&G companies, Global Offshore (Malaysia) Sdn Bhd and KGL Ltd, by the end of the year.
“At the end of the year, we hope to finalise the acquisition of 100% of the shares in these companies. These companies have existing business in O&G and have contracts in hand from Petronas. They are good ventures,” he said, adding that the O&G business would become the second core activity for the company.
Global Offshore is 51%-controlled by Selecta Flow (M) Sdn Bhd, a private company and a vehicle of Datuk Khalid Ngah, while the remaining 49% is held by Global Asia Pacific Industries Sdn Bhd, a unit of US-based, Nasdaq-listed Global Industries Ltd.
Global Industries’ largest shareholder is William J Dore who, according to Bloomberg, has a 10.5% stake in the US O&G player.
Global Offshore is an installation and pipelaying contractor and, through its parent company, operates the pipelay barge Hercules, as well as other offshore construction vessels. Rozali said efforts would be made to secure jobs in the O&G sector in Malaysia and other parts of the world, as there is a lot of potential in the sector.
“We are confident that it will contribute substantially. By next year it should contribute about 20% to our revenue and, hopefully, five years down the road it will contribute 60%,” he said.
However, Rozali reiterated that Puncak Niaga’s water, waste-water and environmental businesses remain the company’s core focus and they have much potential despite the differences between the company, the Selangor government and the federal government on the issue of water-sector consolidation in Selangor.
“We assure our shareholders that we are continuing to supply quality water for both industrial and domestic consumers … with the constraints that we have, with limitations in terms of investment and capital expenditure that have been put on hold by the federal and state governments,” he said.
On the issue of Selangor’s water-sector consolidation, Rozali said: “As a company, we have obligations to fulfil under our concession agreement. The state and federal governments have different authorities and responsibilities in this business. Raw water and land are under the state’s purview. Financing, licensing and approving certain budgets and works are under the purview of the ministry and National Water Services Commission (SPAN).
Everybody has their own jobs to do and I hope they follow the spirit of the concession agreement.”
He said any talks on acquisitions must follow the agreement and he would await new suggestions or proposals from both the state and federal governments.
Puncak Niaga is also set to expand its water business overseas. In the pipeline is a project in Cambodia, for which the company hopes to ink a contract in the next few months. It is also exploring opportunities in China, India and Laos.
