SapuraKencana Petroleum Bhd, Malaysia's biggest oil and gas (O&G) services company, is bidding for RM18.3bil (US$6bil) of new contracts in countries mainly outside South-East Asia as it seeks to double its order book.
The Selangor, Malaysia-based company, with existing orders of US$6bil, sees growth in South America, East and West Africa, and India, chief executive officer Datuk Shahril Shamsuddin said in an interview in Singapore. About 40% of the contracts it's bidding for are in Brazil, while another 30% are for work in India and Africa, he said.
SapuraKencana won shareholder approval yesterday for its US$2.9bil purchase of the tender-rig operations of Seadrill Ltd. The deal will make it the world's largest operator of tender rigs with 51% of market share.
Shahril is overseeing the acquisition about 10 months after SapuraKencana was formed by the RM11.9bil (US$3.9bil) merger of two Malaysian O&G companies.
“Moving ahead, the major acquisitions have already been made,” Shahril said in an interview with Rishaad Salamat on Bloomberg Television's On the Move Asia'.
“The main objective now is to consolidate.” The stock fell 1% to RM3.05 in Kuala Lumpur trading at 11:24 am local time. It's advanced 45% since it began trading on May 17, compared with the 10% rise in the FBM KLCI Index.
Tender rigs are barges that carry drilling equipment to oil platforms at sea which can be removed when work is completed, Shahril said. This gives SapuraKencana the option of flexible vessels that can move from one site to another without the need for a permanently installed drilling package, he said.
Investors approved the Seadrill deal including the placement of 587 million new SapuraKencana shares at 2.80 ringgit apiece, the Malaysian company said in a statement yesterday. SapuraKencana gains 13 tender rigs as part of the acquisition, in addition to the 5 rigs it owns with Seadrill under a joint venture, Shahril said. After the transaction it will operate 21 tender rigs, including five under construction.
SapuraKencana was created last year following the merger between SapuraCrest Petroleum Bhd. and Kencana Petroleum Bhd. The chairman of the latter is Datuk Mokhzani Mahathir, the son of former Malaysian Prime Minister Tun Dr Mahathir Mohamad. - Bloomberg