Tuesday, 16 September 2014

Priceworth expands into oil and gas sector

Priceworth International Bhd is expanding into the oil and gas (O&G) sector through a joint venture (JV) with Miri O&G company Semaring Enterprise Sdn Bhd.

Under the JV, Priceworth and Semaring Enterprise will seek O&G works from national oil company Petroliam Nasional Bhd (Petronas) and its partners with profit sharing contracts (PSC).

Semaring Enterprise is a licensed and registered contractor and supplier for Petronas and its PSC partners.

Priceworth signed the JV agreement through its wholly owned subsidiary Maxland Dockyard & Engineering Sdn Bhd.

“Priceworth is undertaking this proposed JV to mitigate any over-dependence on the core timber business, and seek alternate income streams.

“The outlook on the O&G industry remains positive, which makes this proposed JV a good strategy to use our existing facilities and infrastructure,” said managing director Andrew Lim in a statement yesterday.

Priceworth operates a shipyard in Seguntor, Sandakan, via Maxland Dockyard (formerly Maxland Shipyard Sdn Bhd). This shipyard includes a dockyard and engineering facility to fabricate and service vessels and barges.

“Priceworth’s shipyard is strategically located on the east coast of Sabah and will be the only one serving this area, providing cost savings in terms of travel distance. Other nearest shipyards are in Labuan or Sarawak,” he added.

“Semaring Enterprise has had a long track record in this sector since 1994. We have delivered over RM800mil in O&G works in the past four years,” said Semaring Enterprise director Dawat Gukang.

“We are pleased that Maxland Dockyard will become our technical and advisory partner in this sector,” he added.

Under the JV, Priceworth will provide Semaring Enterprise with technical and advisory services in tendering/competing/bidding for the award of O&G works from Petronas and its PSC partners.

Semaring Enterprise will be well-positioned to expand further into upstream drilling operations, namely, exploration and production, integrated facility maintenance, hook up and commissioning, installation and pipe maintenance, as well as fabrication and shipbuilding services.

Priceworth will also provide the services, expertise and support with respect to the performance, implementation and completion of any O&G works awarded to Semaring Enterprise by Petronas and its PSC partners.

The JV will share the net profits and costs as follows: 60% to Maxland Dockyard and 40% to Semaring Enterprise.

Priceworth, a fully integrated timber company, moved into sustainable forest management in 2009 and continues its transformation into a supplier of sustainable, renewable timber.

The group also ventured into the shipyard business in 2012 by building new vessels and performing maintenance services for external clients, besides maintaining its own fleet of vessels for timber delivery.