Puncak Niaga Holdings announced that its indirect wholly owned unit, GOM Resources Sdn Bhd, has bagged a service contract worth RM187.3 million from American oil company HESS.
Puncak Niaga told Bursa that the contract includes the provision of the integrated transportation and installation of offshore facilities for early production scheme, integrated gas development project and North Malay basin field.
It added the contract period will be 17.5 months and it has the option to extend for another two years by giving a written notice to GOM.
Puncak Niaga anticipates that the project would contribute positively to the future earnings and net assets of Puncak group.
Petronas is understood to have picked the Malaysian unit of France’s Technip to carry out a conceptual study on a potential offshore processing solution for its multi-billion dollar K5 high carbon dioxide gas field development off Sarawak.
The offshore option will be compared with an alternative study that focuses on onshore processing of the field’s output.
Technip will carry out the offshore processing study, which is expected to last at least six months, in Malaysia on a proposed multi-platform development to separate CO2 from K5 gas after it is extracted for re-injection into producing or depleted oil and gas fields up to 250 kilometres away from Bintulu.
This option involves the construction and installation of a central processing platform, two gas compression platforms and two wellhead platforms, according to sources.
The engineering work to be carried out by Technip in Kuala Lumpur will run concurrently with a 15-month joint study Petronas and France’s Total have been undertaking in Paris on an earlier proposal to gather the K5 gas at an offshore platform for transport to an onshore facility 230 kilometres away near the Bintulu liquefied natural gas plant.
Under this first plan, the CO2 stripped out from the gas would then be re-exported to the offshore fields between 200 and 250 kilometres away from Bintulu.
The results of the parallel studies will serve as the basis for drawing up a field development plan as well as any further negotiations between Petronas and Total on a production sharing contract for K5.
Gas from the shallow-water discovery contains about 70% CO2, but industry estimates place its recoverable resources at between 3 trillion cubic feet and 4 Tcf.
CO2 extracted from K5 is understood to be intended for re-injection into three fields — Jintan, Seria and M4.
Jintan and Seria lie in Block SK-8 and have been developed via tiebacks to the M1 and M3 complexes, respectively.
M4 is a depleted gas field that has been flagged up as a potential candidate for CO2 sequestration.
Upstream understands the parallel studies will also look at reinjecting CO2 in an unidentified field about 50 kilometres away from Bintulu to boost hydrocarbon recovery.
K5 stands as potentially the gas field with the highest CO2 content to be developed commercially in Malaysia.
The 1970 discovery came in top on recoverable hydrocarbon resources among 10 fields studied in 2006 for CO2 extraction off Sarawak.
Petronas is expected to follow up with a front-end engineering and design competition on the pioneering high CO2 gas field development-cum-carbon sequestration project as early as the second half of this year.
Gas from K5 will be exported to the Bintulu liquefied natural gas complex, currently undergoing expansion to add a ninth train with 3.6 million tonnes per annum processing capacity.
Petronas is believed to be looking at adding two further trains to the Bintulu complex now boasting nameplate capacity of 25.7 million tpa.
The Employees Provident Fund (EPF), which holds a 9.5% stake in MISC Bhd, has accepted Petroliam Nasional Bhd's (Petronas) revised offer price of RM5.50 per share to take the company private.
EPF's acceptance of the revised offer price brought the acceptance level to 17.1% as of yesterday. With this stake, Petronas' total shareholding was now 79.77%. The offer needs to reach the 90% acceptance level for it to become unconditional, thereby paving the way for the stock's delisting.
In a filing with Bursa Malaysia, MISC said the shares for which acceptances had been received but not verified stood at 0.01% as at 5pm yesterday.
EPF's acceptance confirms an earlier StarBiz report that EPF could “cave in” and accept the revised offer price of RM5.50 per share. By accepting the offer, EPF stands to pocket some RM2.33bil in gains.
Petronas had, on April 5, revised the offer price to RM5.50 from RM5.30. It would have to fork out RM9.2bil, about RM400mil more, to take its shipping arm private.
MISC's third-biggest minority group is Permodalan Nasional Bhd, which has a 6.35% equity interest through its various unit trusts.
MISC's other minority shareholders include Penang Development Corp and Pacific Mutual Fund Bhd, which hold a 1.3% and 0.09% interest, respectively.
On April 8, independent adviser AmInvestment Bank Bhd had advised shareholders to accept the revised offer, saying that it was “not fair” but “reasonable”.
It said that the offer was “not fair” as the revised offer price translated to a discount of between 3.3% and 9.8% to the range of the indicative sum-of-parts valuation (SOPV) of RM5.69 to RM6.10 per MISC share.
However, it added that the revised offer was “reasonable” all the same after taking into consideration the risks and challenges the shipping industry faced.
Meanwhile, research houses Kenanga Research and RHB Research have both recommended minority shareholders to accept the offer.
Kenanga Research said it maintained its recommendation for minority shareholders to accept the offer, given that the revised offer price was a better offer, and at a 19% premium above its SOPV of RM4.61.
It also believes that the shipping industry would continue to be negatively impacted by lower charter rates and higher bunker costs.
RHB Research, which had earlier recommended for minority shareholders to reject Petronas' initial offer, said that it would be difficult for the minority shareholders to ask for a higher offer price due to the uneven distribution of share ownership in MISC.
Moving forward, RHB said it foresaw a restructuring within the MISC group after it was taken private, which might potentially see its business entities eventually being re-listed separately. The remaining minority shareholders have until April 19 to either accept or reject the offer.
Yesterday, the counter closed one sen down to RM5.41, with 25.53 million shares being done.
SINGAPORE: Indonesia's oil export revenue is falling far below government expectations as output drops to a more than 40-year low, piling pressure on authorities to confront a widening trade deficit fuelled by energy subsidies that encourage consumption.
Aging fields and years of scant new discoveries mean Indonesia is exporting less crude, bringing home to the former Opec member the US$22bil cost 4% of economic output last year of its generous subsidy programme.
Crude and oil products export revenue for the first two months of the year have fallen 23% to US$2.2bil compared with the same period last year, while oil imports by value are up 16%, according to the statistics bureau.
That has translated into an oil trade deficit of US$4.9bil so far this year, widening from US$3.2bil a year ago.
“Fuel consumption and imports are surging on cheap fuel, with subsidised prices some 60% below international prices, and buoyant domestic demand,” said Chua Hak Bin, head of emerging Asia economics global research at Bank of America Merrill Lynch.
“We expect the government to introduce some rationing scheme or hike subsidised fuel prices in the coming months to contain the escalating fiscal costs and widening oil trade deficit.”
President Susilo Bambang Yudhoyono could announce next week new measures to restrict the use of energy subsidies, which have provided Indonesians with the cheapest fuel in Asia.
But with elections looming next year, and memories of violent protests over fuel-price rises in 2005 and 2008, he is expected to bow to populist wishes and not scrap subsidies.
Instead, the president is considering a ban on the use of subsidised fuel by the nation's 11 million private cars, a move that could save the government US$8.6bil this year and erase a fiscal deficit, a presidential adviser said.
Indonesia's overall trade deficit widened to US$330mil in February, up from US$70mil the previous month.
Indonesia's state budget for 2013 has set an oil output target of 900,000 barrels per day, but the country's energy regulator SKKMigas said production was more likely to average around 830,000 bpd. That would be the lowest since 1969.
The government's take of total oil and gas revenues is expected to be about US$30bil or about 20% of the budget for this year, according to SKKMigas, sharply lower than the one-third that oil and gas sales contributed to state coffers each year back when Indonesia was a net exporter and a member of Opec.
Unless price increases can offset falling production or Indonesia can reverse the output decline, the contribution oil and gas makes to state will likely continue to fall.
Indonesia has often fallen short of production targets, with crude and condensate output declining at an annual rate of 3.8% between 1998 and 2011.
The production decline has mainly impacted exports as Indonesia now keeps the bulk of its output for domestic use, but it has also had to increase its imports of refined products as subsidies push up the use of cheap fuel.
Indonesia's crude export revenue will likely drop further this year as ample oil supplies weigh on prices while its top buyer Japan aims to reduce expensive oil imports for power use.
“This is definitely not great news for the trade deficit, but we have to remember that crude oil exports have not been a key driver of overall exports,” said Lim Su Sian, an economist with HSBC. Reuters
Alam Maritim Resources Bhd’s wholly owned subsidiary, Alam Maritim (M) Sdn Bhd, has secured two contracts with a combined value of RM85.2mil.
In an announcement to Bursa Malaysia, Alam Maritim said these contracts included a letter of award from Petronas Carigali Sdn Bhd for the provision of an accommodation vessel for a primary period of five years, with an optional extension for another one year. Valued at around RM61.32mil, this contract commenced on March 11, 2013.
It said the other contract was for the provision of a platform supply vessel and an extension of contract for a work barge from two established oil and gas services companies. The provision of the platform supply vessel is for a primary period of 270 days, with an optional extension for another 135 days, while the provision of the work barge is for 104 days with no option to extend.
Singapore-based Temasek Holdings Pte has appointed former Petroliam Nasional Bhd chief executive officer Tan Sri Hassan Marican as chairman of its new energy unit, Pavilion Energy Pte Ltd.
Bloomberg reported that Pavilion Energy, which has an initial authorised capital of S$1bil (RM2.5bil), would be operational in September and was set up to tap growing demand in Asia while focusing on liquefied natural gas (LNG).
China National Petroleum Corp. (CNPC) dan Petronas dikatakan antara gergasi sektor minyak dan gas yang sedang menilai untuk mengambilalih aktiviti minyak dan gas luar pesisir milik Marathon Oil Corp di Angola, menurut sumber terdekat.
Perkembangan itu bakal menjadi aktiviti jual beli terbaharu sektor itu di Afrika, dengan syarikat dari Asia itu menunjukkan minat yang tinggi ke atas pasaran baru.
Marathon Oil Corp. merupakan syarikat kerdil minyak dan gas dari Amerika Syarikat (AS) yang turut mempunyai aktiviti di Iraq, Norway dan Poland.
Agensi berita Reuters menganggarkan sekurang-kurangnya AS$6 bilion (RM18.6 bilion) nilai aktiviti minyak dan gas milik syarikat dari AS itu telah dijual, akibat tekanan pemegang sahamnya yang mahu mengambil kesempatan ke atas kemampuan syarikat dari Asia membeli perniagaan mereka.
Tahun lalu, aktiviti penggabungan dan pengambilalihan di dalam sektor minyak dan gas bernilai RM1.072 trilion, dengan syarikat-syarikat dari Asia menguasai sehingga 19.6 peratus daripada nilai aktiviti tersebut.
Penguasaan itu telah meningkat daripada 7.6 peratus pada 2003.
Menurut penganalisis, kemampuan untuk membeli syarikat asing tidak menjadi satu masalah kepada syarikat-syarikat dari Asia, memandangkan mereka mendapat perlindungan penuh daripada kerajaan masing-masing.
Petronas tahun lalu telah membayar RM15 bilion untuk mendapatkan syarikat minyak dari Kanada, Progress Energy Resources Corp. Sementara CNPC pula, bulan lalu telah bersetuju membeli aktiviti minyak dan gas di Mozambique membabitkan nilai RM13.02 bilion.
PETALING JAYA: SapuraKencana Petroleum Bhd (SKPB) is on track to raise RM1.64bil from a placement agreement with CIMB Investment Bank Bhd, Maybank Investment Bank Bhd and CIMB Securities (Si) Pte Ltd for a proposed placement of 587 million new SKPB shares at an issue price of RM2.80 per share to selected investors.
“The placement price was arrived at after taking into consideration the five-day, volume-weighted average market price of SKPB shares up to and including April 2 being the price-fixing date for the proposed placement of RM3.04,” the company said in a note to the stock exchange.
The company will release more details on the exercise in due course, which some analysts have deemed as “positive” for the stock should it go through as planned.
The proceeds would be used within a month to part satisfy the initial Seadrill Tender Rig Ltd (STRL) price of RM780.9mil on the STRL closing, and part satisfy the initial STRL price on the STRL closing in place of the portion that had been envisaged earlier to be satisfied by the issuance of three-year redeemable exchangeable preference shares or REPS to the tune of RM743.3mil.
The rest RM119.4mil meanwhile, would go towards defraying the expenses related to the proposed transaction and proposed placement.
SKPB also mentioned that it had submitted an application on the proposed exercise to the Foreign Exchange Administration of Bank Negara.
To recap, SKPB had late last year entered into a non-binding agreement to acquire Seadrill Ltd's tender rig business in a multi-billion-ringgit deal to be satisfied by a mix of shares and cash, a move that would see the former becoming a leading global player in the tender rigs and semi-tender rigs market.
In a recent research note to its clients, Maybank Investment Bank Research (MIBR) rated SPKB a “buy”, with a target price of RM4.10 on expectations of an upgrade in the near future.
“Consensus forecasts are conservative, in our view, for they do not fully reflect the impact from the STRL acquisition, which would add at least RM700mil per annum to earnings,” MIBR pointed out in the report, adding that “this Seadrill business, which has an enterprise value of US$2.83bil (RM8.72bil), would elevate SKPB's order backlog by 34% (+US$1.5bil (RM4.63bil)) to US$5.9bil (RM18.2bil) once the acquisition is concluded.”
(Reuters) - Exxon Mobil (XOM.N) and BHP Billiton (BHP.AX) are planning to build the world's largest floating liquefied natural gas (LNG) processing and export plant off the northwestern shore of Australia, despite growing concerns about the cost competitiveness of the country's LNG projects.
At around half a kilometer (0.3 miles) long, the vessel would be nearly as long as five football fields laid end-to-end and would be the largest floating facility in the world.
The plant would bump up Australia's current LNG production by nearly 30 percent, producing 6 million to 7 million metric tons (6.62 million to 7.71 million tons) per annum (mtpa), enough to fuel the LNG needs of Japan, the world's largest importer of the gas, for about a month.
Exxon and BHP's decision to develop the Scarborough field using floating LNG is another vote of confidence in the as yet untried technology, which energy companies hope will help cut down on the ballooning costs of developing gas.
Exxon, which detailed the plan in a filing with Australia's environment department on Tuesday, did not give a cost estimate for the plant.
Australia currently has $190 billion worth of LNG projects under way and is on track to replace Qatar as the world's largest LNG exporter by the end of the decade.
But the country has been plagued by cost inflation, and of seven LNG plants under construction there that are due to come online in 2014 or later, four have already announced cost blowouts ranging from 15 to 40 percent.
FITCH BEARISH
High costs and competition from other LNG producing regions such as North America and East Africa have led some industry analysts to predict that Australia's growth potential as an LNG producer is increasingly limited.
Fitch Ratings was the latest to forecast lower growth for the Australian LNG sector, saying in a report on Tuesday that increased costs had eroded the country's competitive advantage.
Royal Dutch Shell (RDSa.L), considered the industry leader in floating LNG, has touted floating technology as a way to circumvent Australia's rising costs and cut down on construction time.
"Floating (LNG) is actually very good for the federal government in terms of getting the tax revenues out faster and quicker," Ann Pickard, Shell's country chairman in Australia, said earlier this year.
An added advantage of floating LNG vessels is that they can be redeployed to another location once a gas field is depleted.
The Scarborough LNG plant would start production in 2020-2021 and be moored 220 kilometers (137 miles) from the Australian coast, Exxon said in the government filing.
If the Scarborough gas field were developed using floating LNG, the plant would be about double the capacity of Shell's Prelude LNG, also off the cost of Australia, which will have a capacity of 3.6 mtpa when it comes online in 2017 and be the world's first floating LNG plant.
Shell indicated that its Prelude LNG project was expected to cost in the range of $10.8 to $12.6 billion. With a similar cost structure, Scarborough LNG would cost $18 billion to $24.5 billion, according to Reuters' calculations.
The Scarborough floating LNG plant would be built offshore, likely in South Korea, which is already in talks to build similar facilities.
Exxon and BHP, which are 50-50 joint venture partners in the Scarborough development, expect to make a final investment decision on the plant in 2014-2015, Exxon said.
(Editing by Muralikumar Anantharaman)
TH Heavy Engineering Bhd (THHE) has won a contract from Murphy Sarawak Oil Co Ltd worth approximately RM196mil to build the topsides for platforms offshore Bintulu.
In a filing to Bursa Malaysia on Tuesday, the company said it received a letter of award for the engineering, procurement, construction and commissioning (EPCC) for Permas Production (PR-PA) topsides at Murphy Sarawak Oil's SK311 Permas development contract.
The EPCC contract will be undertaken by THHE's subsidiary, THHE Fabricators Sdn Bhd. The platform is approximately 95km offshore Bintulu, Sarawak.
The contract is a one-off contract and is scheduled to be complete within approximately 16 months, it said.
“The contract is expect to contribute positively to the earnings and net assets per share of THHE for the financial year ending Dec 31, 2013 and 2014 respectively,” THHE said.
The company said the risks pertaining to the contract include the availability of skilled manpower and materials, changes in prices of materials, and changes in political, economic and regulatory conditions.
