Petronas Q1 profit after tax surges 124% to RM10.3b on higher prices

Petroliam Nasional Bhd (Petronas) chalked up a solid performance in the first quarter ended March 31, 2017 with profit after tax surging 124% to RM10.3bil from RM4.6bil a year ago due to higher oil prices and improved margins from upstream and downstream businesses.

The national oil corporation said on Friday its revenue increased by 25% to RM61.6bil from RM49.1 bil a year ago.

Earnings before interest, tax, depreciation and amortisation (Ebitda) rose by RM9bil or 58% to RM24.6bil from RM15.6bil a year ago.

During the first quarter, average dated Brent stood at US$53.78 per barrel compared with US$49.46 a barrel in the fourth quarter of 2016.

“The group’s cash flows from operations also grew by 86% cent compared to the corresponding quarter last year to RM18bil, as a result of higher average realised prices,” Petronas said in the statement.

Petronas asked to exit Myanmar in protest of Rohingya crisis

Malaysian members of parliament on Wednesday asked state energy firm Petroliam Nasional Bhd , or Petronas, to exit its Myanmar operations and investments to protest the violence against the Rohingya Muslim minority.

Petronas is one of the biggest employers in Malaysia, where Islam is the official religion, and the  country’s only Fortune 500 company. It owns several natural gas blocks in Myanmar along with a cross border pipeline that transports gas to Thailand.

Hundreds of thousands of Rohingya Muslims have fled Rakhine state in Buddhist-majority Myanmar since security forces responded to Rohingya militants’ attacks in August with a crackdown that has reportedly caused widespread killings and the burning of Rohingya villages. The United Nations has denounced the crackdown as a classic example of ethnic cleansing.

Petronas, Aramco seeking US$8 bil for Malaysian project

Petronas and Saudi Aramco are seeking to raise US$8 billion for a refinery and petrochemical complex via a bridge loan, Project Finance International (PFI) reported on Wednesday.

Refinery and Petrochemical Integrated Development (RAPID), in the southern Malaysian state of Johor, is a US$27 billion project located between the Malacca Strait and the South China Sea, conduits for Middle East oil and gas bound for China, Japan and South Korea.

The Saudi energy giant Aramco agreed in February to buy a US$7 billion stake in RAPID's refinery and cracker project. Aramco agreed this month to take a US$900 million stake in petrochemical projects in the RAPID complex.

PFI, which is owned by Thomson Reuters, reported that more than 10 banks have been invited to submit pricing for the loan facility, which will have a tenor of 1.5 years.

Pengerang Integrated Complex 77 Pct Complete, To Be Fully Operational In Q1 2019

The construction of the Pengerang Integrated Complex (PIC), which forms part of the Pengerang Integrated Petroleum Complex (PIPC), has achieved 77 per cent completion and is expected to be fully operational in the first quarter (Q1) of 2019.

Prime Minister Datuk Seri Najib Tun Razak said the construction of the critical infrastructure had been completed to support the refinery and cracker operations later.

He said the supporting facilities encompassing the Regasification Terminal 2 (RGT2) and Pengerang Co-Generation Plant (PCP) had started to undergo the accreditation process and would meet the industry requirements of the PIC, besides giving the benefits to the community not only in Pengerang but Malaysia generally.

"By 2020, the total investments in PIPC is expected to generate some RM8.3 billion in gross national income, with PIC as the biggest contributor. As of end-September, I have been informed by Petronas that the progress of the PIC project has achieved 77 per cent.

Global oil demand will pass 100 million barrels per day by 2020, says OPEC

OPEC General Secretary Mohammad Barkindo said Thursday that oil markets are rebalancing at "an accelerating rate" and that he foresaw "no peak" for oil demand for "the considerable future."

Speaking at the Oil & Money conference in London, Barkindo said confident prices would rise and global oil demand would grow as the global economy continued to strengthen.

"We expect global oil demand to surpass 100 million barrels per day by 2020," Barkindo told the audience of oil industry leaders. This figure is far above the oil producing group's forecast for 2017 in which global oil demand is expected to be around 96.8 million barrels per day.

This strengthening in global oil demand meant that there was "no peak demand for the considerable future," Barkindo said.

As such, continued investment within the oil industry was crucial, he said, as was a continued working partnership with non-OPEC producers.

Subsea 7 and Sapura Energy Terminate Joint Venture

Subsea 7 has agreed with Sapura Energy Berhad to discontinue the SapuraAcergy joint venture.

SapuraAcergy’s heavy-lift and pipelay vessel, Sapura 3000, has been sold to a subsidiary of Sapura Energy Berhad.

The decision by Subsea 7 and Sapura Energy Berhad to discontinue the joint venture reflects the evolution of both companies’ long-term strategic priorities. Subsea 7 remains committed to the Asia Pacific region, with offices located in Malaysia, Australia, Indonesia and Singapore, the Oslo-listed company said on Tuesday.

As a result of the discontinuation of the joint venture and the sale of Sapura 3000, Subsea 7 said it expects to receive approximately USD 100 million in cash dividends, and recognise a loss of approximately USD 10 million in the third quarter.

Petronas bars TH Heavy Engineering unit from various job scopes

Loss-making TH Heavy Engineering Bhd, which is 30.08%-owned by Lembaga Tabung Haji, says its oil and gas fabrication unit has once again been barred by Petronas from various job scopes due to its “non-performance” in a Sabah project, this time without a specified timeline.

Its wholly-owned THHE Fabricators Sdn Bhd (TFSB) received the letter on the exclusion from Petronas, which stands for Petroliam Nasional Bhd, on Monday.

In a filing today, THHE said the latest exclusion was in relation to TFSB’s “non-performance in relation to a contract known as “Procurement, Construction and Commissioning (PCC) of KNPG-B Topside PH II, Kinabalu Non-Associated Gas (NAG) Development Project” (PH II Kinabalu Project).

The letter is another blow to TFSB, which is currently facing a two-year ban from participating in tenders by Petronas Carigali since April 4, 2016, due to what Petronas Carigali described as “non-performance” on TFSB’s part under the same contract.

KNM Awards UK EPCC Contract To China Western Power Industrial

KNM Group Bhd’s UK subsidiary, Peterborough Green Energy Ltd, has executed and awarded a £346 million (RM1.9 billion) engineering, procurement, construction and commissioning contract (EPCC) to China Western Power Industrial Co Ltd (CWPC) on a deferred payment scheme.

In a filing to Bursa Malaysia today, the company said the contract involves the erection of a net 36 megawatt energy from waste power plant for its Peterborough Green Energy Project in the UK.

KNM said the contract is for a period of 37 months from the commencement date of the construction, which is expected to commence in first quarter of 2018.

It said upon successful completion and commissioning of the plant, the project is expected to yield positive returns in line with KNM’s long term strategic direction of generating sustainable and recurring income streams from its renewable energy businesses for the Group.

DOE stop-work order on Lotte Chemical Titan lifted

The Department of Environment (DOE) has lifted its stop-work order on Lotte Chemical Titan Holding Bhd's (LCT) KBR Catalytic Olefins Technology catalytic cracking reactor (K-COT) within LCT's TE3 Project.

LCT said the stop-work order issued by the DOE on Oct 1 was lifted Oct 5th upon the company satisfactorily completing requested remedial actions.

To recap, LCT had on Oct 1 received the stop-work order from the DOE on its K-COT to mitigate and reduce odour emission and eliminate surface oil sheen/film discharge.

LCT subsequently said it was attending to remedial actions and would provide an update in due course.

Petronas Chemicals sells 50% stake in PRPC Polymers to Saudi Aramco

Petronas Chemicals Bhd has disposed of a 50% stake in its unit PRPC Polymers Sdn Bhd to Saudi Arabian Oil Company (Saudi Aramco) for US$900mil or RM3.8bil.

Petronas Chemicals said on Monday it had inked an agreement with Saudi Aramco’s unit Aramco Overseas Holdings Coöperatief U.A.(AOHC) to divest half of its 100% stake last Friday.

PRPC Polymers’ principal activities are to develop, construct, commission and operate polymers and glycol plants for the production and sale of products. PRPC Polymers has not started operations since the date of incorporation.

Based on the latest audited financial statements of PRPC Polymers for FY ended Dec 31, 2016 it has not generated any operating income, and recorded net loss of RM57mil. PRPC Polymers’s net assets are RM1.3bil.

“Petronas Chemicals will share the project and operation risk with Saudi Aramco upon divesting 50% of the equity interest and 50% of the shareholder loans in PRPC Polymers to AOHC,” it said.

Serba Dinamik secures contract worth RM206mil

Serba Dinamik Holdings Bhd via its wholly owned subsidiary Serba Dinamik Sdn Bhd has secured contracts worth a combined estimated value of RM206mil.

It said the contracts comprise three operation and maintenance (O&M) projects and four engineering, procurement, construction and commissioning (EPCC) projects with tenures ranging from six months to 10 years.

Serba Dinamik also announced that it will begin construction work of its new maintenance, repair and overhaul (MRO) and inspection, repair and maintenance (IRM) centre in Bintulu, Sarawak. The construction work is expected to take approximately two years to complete at a value of about RM200mil.

In addition, Top Luxury Sdn Bhd, a wholly owned subsidiary of Serba Dinamik, will be undertaking the construction works for Pengerang eco-Industrial Park value at approximately RM400mil.

Petronas Carigali among 12 qualified for Brazil pre-salt rounds – report

National oil firm Petroliam Nasional Bhd (Petronas) subsidiary Petronas Carigali Sdn Bhd (Carigali) is among a dozen companies that have been qualified by the Brazilian National Petroleum Agency (ANP) to bid for the highly-coveted two pre-salt rounds featuring production sharing contracts due to take place today.

Energy portal Upstreamonline.com reported overnight that eight companies have successfully registered to bid for the second pre-salt round, which will see the ANP offering four “unitisable” areas surrounding existing discoveries such as North of Carcara, South of Gato do Mato, Sapinhoa Surround and Southwest of Tartaruga Verde.

It said Carigali, Petrobras, ExxonMobil, Shell, Statoil, Total, Repsol Sinopec and Galp Energia have applied for the second round.

Upstreamonline.com said that according to the regulator, 11 companies have qualified to submit offers in the third pre-salt round.

SPRM Tahan Pegawai Petronas Carigali

Seorang pegawai kanan Petronas Carigali Sdn. Bhd (PCSB) antara tiga individu yang ditahan kerana disyaki terlibat dalam kes rasuah membabitkan RM23.7 juta.

Pengurus penghantaran projek yang berusia 45 tahun di syarikat yang perkhidmatan cari dan penghasilan minyak danm gas itu ditahan oleh Suruhanjaya Pencegahan Rasuah Malaysia (SPRM) di pejabatnya di Menara Berkembar Petronas, KLCC pada Selasa.

Satu lagi pasukan SPRM turut menahan pengarah syarikat berusia 57 tahun yang melaksakana kerja untuk PCSB ketika suspek berada di rumahnya di Batu 9, Jalan Cheras.

Pasukan ketiga pula menyerbu kediaman bekas pembantu teknikal PCSB di Puncak Alam dan menahannya di sana.

Pengarah Siasatan SPRM, Datuk Simi Abd Ghani mengesahkan tentang penangkapan itu yang dilakukan antara pukul 2.40 petang hingga 3 petang.

TH Heavy 2Q losses expand

TH Heavy Engineering Bhd’s net loss widened 145% to RM16.79 million or 1.5 sen per share for the second quarter ended June 30, 2017, from RM6.85 million or 0.61 sen per share a year earlier, largely on unrealised foreign exchange (forex) losses.

It didn't help that revenue also contracted 69% year-on-year to RM2.38 million in 2QFY17, from RM7.72 million a year ago, amid lower fabrication activities.

In a bourse filing, TH Heavy said the widening of its losses was due to unrealised forex loss of RM1.4 million and the exclusion of unrealised forex gain of RM8.7 million recorded in the previous year’s corresponding quarter.

For the six months ended June 30 (1HFY17), net loss shrank 6% to RM37.97 million, from RM40.29 million, while cumulative revenue plunged 79% to RM4.63 million, from RM22.24 million.

Petronas plans expansion to capture India growth

Petronas, which has more than two decades of strategic partnerships in India, is enhancing its business strategy to strengthen and expand its presence in the world’s fastest-growing economy, said its President and Group CEO, Datuk Wan Zulkiflee Wan Ariffin, in a press release issued on Thursday.

“Petronas aims to continue to be part of India’s exciting journey and support its sustainable growth ambitions and commitments through further collaborations with our existing partners as well as through new strategic-fit opportunities,” he said.

Wan Zulkiflee, currently on Petronas’ annual official visit to meet with India’s industry leaders and partners, said high on Petronas’ priority would be the expansion of its liquefied natural gas (LNG) supply in India to help meet the rising demands from the power, agriculture and transportation sectors.

According to the release, Petronas has the added advantage of providing tailor-made solutions across the LNG value chain such as flexibility, engineering expertise and experience in operations management.

Sabah eyes 3 companies for RM3.4bil ammonia plant

Sabah Oil and Gas Development Sdn Bhd (SOGDC) is considering three companies to build its second ammonia plant costing US$800 million (RM3.4 billion).

Sabah Industrial Development Minister Raymond Tan said the new ammonia project would be sited next to the present Sabah ammonia urea (Samur) plant in the Sipitang Oil & Gas Industrial Park (Sogip).

“The plan is being studied by the SOGDC board of directors with applications from Eurochem, a China consortium and Petronas’s Markisa being considered,” he said.

The project was expected to be completed in 2021, he said when replying to Limus Jury (Upko-Kuala Penyu) in the state assembly today.

Hess starts full field development of North Malay gas field

Independent U.S. firm Hess has announced that it has commenced full-field development of the North Malay basin project offshore Malaysia.

The North Malay Basin Block PM302 is located approximately 186 miles (300 km) offshore the Trengganu Gas Terminal in the Gulf of Thailand.

In its second quarter results update, Hess said that the hook-up of the topsides for the central processing platform was completed in the quarter and first production of natural gas commenced in mid-July with commissioning activities ongoing.

"We are still in the process of commissioning the field and expect net production to reach its planned plateau rate of 165 million cubic feet per day of natural gas during the third quarter," said chief executive John Hess.

Sarawak's Petros has been officially formed

The Sarawak wholly-owned oil and gas company or Petros has been officially formed, the Chief Minister, Datuk Amar Abang Haji Abdul Rahman Zohari bin Tun Datuk Abang Haji Openg announced here last night.

“Tonight, I want to tell you that we have officially formed our oil company, Petros,” the Chief Minister, to the applause of the crowd said in his address to ministers, staff members of his ministries and office during an appreciation dinner organised by his office at a leading hotel here, last night.

He said all the board members of the company had been appointed and pointed out that they were drawn from among Sarawakian professionals with wide experience in the oil and gas industry and that none of them were politicians.

Petronas secures another block in Mexico

Petronas subsidiary PC Carigali Mexico Operations, SA de CV, has been awarded shallow-water Block 6 in the Gulf of Mexico’s Salina Basin.

The national oil company said in a statement that Block 6 covered an area of about 559 sq km in water depths of between 30 and 80 metres.

The block will be operated by PC Carigali Mexico in a 50:50 partnership with Ecopetrol, the national oil company of Colombia.

Petronas executive vice president and chief executive officer (upstream) Datuk Anuar Taib said: “I am pleased with our new partnership with Ecopetrol and I am confident this will bring together our capabilities and expertise for a successful collaboration in the Mexico waters.”

Last year, Petronas was awarded deep-water Block 4 and Block 5 in a joint-venture partnership following Mexico’s first ever auction of its deep water exploration areas.

Govt plans to train advanced NDT experts

Non-destructive testing (NDT) is an important field in engineering and science that can save time and money in product testing and research, but Malaysia has fewer than 20 experts in advanced methods in the field.

However, Malaysian Nuclear Agency senior director of commercialisation & technology planning programmes Datuk Dr Zulkifli Mohamed Hashim hopes the agency will be able to start a training programme in advanced NDT techniques within three to five years.

“NDT can test materials for defects, leaks or corrosion without ruining the sample or having to shut (a system) down,” he said, adding that shutting a critical system down for even one day could cost a company millions.

He said the Skills Development Department (JPK) is developing a national occupational skill standard (NOSS) for an advanced NDT programme.

Gas Malaysia raises natural gas prices

Gas Malaysia Bhd has revised up the natural gas tariff for Peninsular Malaysia’s non-power sector to an average base tariff of RM28.05 per MMBtu (one million British thermal units).

However, a government subsidy will lead to lower effective tariff rates for all tariff categories for the period from July 1 to Dec 31, 2017, compared with the existing rates.

In a filing with Bursa Malaysia, the gas distributor said  the Government, through the Energy Commission, had approved on Friday for Gas Malaysia to effect the revision for the six-month period.

The Government has prescribed the incentive based regulation (IBR) framework, which sets the base tariffs for a period of three years from January 2017 and allows changes in the gas costs to be passed through via the Gas Cost Pass Through (GCPT) mechanism every six months.

Malaysia’s oil and gas industry on the road to recovery

There is optimism that the nation’s oil and gas industry is on the road to recovery, said Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi.

“If 2016 was the ‘year of tough decisions’ for the oil and gas industry, then 2017 could well be the year for the road to recovery,” he said when launching the 16th Oil and Gas Asia 2017 Exhibition.

He cited the examples of the Organisation of Petroleum Exporting Countries’ market forecast and recent survey by Reuters that Brent crude oil could average US$58.20 (RM250.12) per barrel this year as examples of positive signs for the industry.

“The interim Q4 (fourth quarter) and FY (financial year) of Malaysia’s state giant Petronas noted a 12% year-on-year growth in profit after tax despite revenues that were some 17% lower,” he said.

One killed in Bintulu tanker explosion

An oil tanker burst into flames in a horrific accident at the Medan Jaya traffic lights in front of Bintulu Medical Centre around 11am, Monday.

Based on unofficial statement, one person was killed, after the tanker collided with a pickup truck that resulted in three other vehicles being burnt in the accident.

Ten firefighters in one fire engine were rushed to the scene after receiving a distress call at 11.53am.

As of press time, the flames have been brought under control.

The authorities are now in the process of trying to identify the burnt victim.

China Petroleum to build olefins storage units in Pengerang for Petronas

A consortium of China Petroleum Pipeline Bureau (CPP) & CPP Petroleum Engineering (M) Sdn Bhd has been signed on to build additional olefins storage units in Pengerang for Petroliam Nasional Bhd's unit.

Petronas said on its unit PRPC Refinery & Cracker Sdn Bhd (PRPC RC) recently signed the engineering, procurement, construction and commissioning (EPCC) contract for the facilities within the Pengerang Integrated Complex.

The national oil company said the consortium would undertake the EPCC for four 1,750MT butadiene bullet tanks; four 2,500MT propylene sphere tanks; and one 12,000MT double-walled cryogenic ethylene tank.

“The construction of the butadiene bullet tanks is expected to be completed by end 2018, while the propylene sphere tanks and the cryogenic ethylene tanks are scheduled to be ready by end Q1 and Q3 2019, respectively,” it said. The value of the contract was not disclosed.

Damansara Realty secures RM26mln contract for Petronas' Pengerang project

Damansara Realty Bhd has bagged a RM26.21 million contract to provide security management services for Petroliam Nasional Bhd’s (Petronas) Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor.

In a filing to Bursa Malaysia
, the company said the contract can be extended to include additional services worth RM9.77 million.

It said Petronas subsidiary PRPC Utilities and Facilities Sdn Bhd awarded the contract to a consortium comprising Damansara Realty’s subsidiary TMR Urusharta (M) Sdn Bhd (TMR), ACME Security Sdn Bhd and AHS Security Sdn Bhd.

It said under the terms of the contract, the consortium will operate and maintain security for utilities, interconnecting and offsite facilities at RAPID, the second mega project in Johor’s Pengerang Integrated Petroleum Complex, which is slated to be the region’s largest oil and gas hub.

Sarawak tubuh Petros bagi cari gali minyak dan gas

Syarikat cari gali minyak dan gas luar pantai milik Sarawak akan memulakan operasinya dalam masa enam bulan lagi, Ketua Menteri Datuk Amar Abang Johari Tun Openg.

Katanya, Petroleum Sarawak (Petros), 100 peratus milik kerajaan negeri, akan bekerjasama dengan syarikat minyak nasional, Petronas,

Pengumuman itu dibuat ketika Sarawak menuntut royalti minyak yang lebih tinggi daripada kerajaan persekutuan.

Bernama turut memetik Abang Johari, sebagai berkata, perkara berkaitan pelaburan awal syarikat itu masih dibincang, tetapi Petros akan memulakan operasinya dalam masa enam bulan lagi.

Beliau berkata keuntungan yang diraih akan dikongsi antara kerajaan negeri dan Petronas berdasarkan ekuiti.

JX Nippon produces first gas from Layang field, offshore Sarawak

JX Nippon Oil & Gas Exploration Corporation’s subsidiary, JX Nippon Oil & Gas Exploration (Malaysia) Limited, is the operator of Block SK10 offshore Sarawak, Malaysia, with a participating interest of 75%, where the Layang field is located. Petronas is its partner with the remaining 25% interest.

The field is located approximately 7 km east of the producing Helang Gas Field in Block SK10.

Natural gas produced from Layang field, together with natural gas from Helang gas field, will be supplied through subsea pipelines to the MLNG Tiga Sdn. Bhd. liquefaction plant in Bintulu, Sarawak, which is partly owned by JXTG Nippon Oil & Energy Corporation. The natural gas will be sold as LNG after liquefaction to its customers including buyers in Japan.

The initial production of natural gas and condensate from Layang field is estimated about 12,000 boed.

PBJV Group bags RM61.2m offshore job

Barakah Offshore Petroleum Bhd has bagged a US$14.28 million contract from Samling Resources Sdn Bhd to supply a well intervention vessel, a support vessel and services for abandonment and decommissioning of Chinguetti and Banda fields, offshore Mauritania.

In a filing with Bursa Malaysia, Barakah said its wholly-owned subsidiary PBJV Group Sdn Bhd has received the letter of award from Samling Resources for the project, which is expected to commence this month.

The Chinguetti oil field is located approximately 80km west of the coastline and 90km from Nouakchott, Mauritania. The project involves temporary plugging of 15 wells.

"The contract is for the provision of a well intervention vessel, a platform supply vessel and all necessary parts, spares, repairs, refurbishments and/or modifications to the well intervention vessel and all coordination, technical support and supervisory works in relation thereto," Barakah said.

Petronas: We have right to terminate contract with MHS Aviation over safety concerns

Petronas Carigali Sdn Bhd’s termination notice of its contract with MHS Aviation Bhd for the services of five EC225 helicopters is within its contractual rights, citing its service suspension since April 2016 due to safety concerns.

The concerns arose from a fatal accident involving the same aircraft model in Norway in April 2016.

Under the contract dated June 29 2011, MHS Aviation, a 51% subsidiary of Boustead Holdings Bhd, provides the services of five EC225 helicopters from Kertih, Terengganu, for the transport of personnel to offshore facilities.

“The suspension of the EC225 service by Norwegian and UK civil aviation authorities has yet to be lifted. Most major oil and gas companies have also ceased using the aircraft model pending assurance of its safety and airworthiness. The safety of its employees remains Petronas Carigali’s top-most priority. The company has had appropriate discussions and negotiations with MHS Aviation prior to reaching the decision to terminate the agreement,” Petronas said in a statement yesterday.

PCSB to terminate RM3bil contract given to MHS Aviation

Petronas Carigali Sdn Bhd is terminating a June 2011 contract involving the charter of five Eurocopter EC225 helicopters from Boustead Holdings Bhd’s subsidiary MHS Aviation Bhd.

The 10-year contract, with an option to extend for another five years, was previously estimated to be worth about RM3bil.

In a filing with Bursa Malaysia, Boustead said its 51%-owned subsidiary MHS, the country’s largest civil helicopter operator, had received a letter dated June 9 from Petronas Carigali giving a 90 days’ notice of its intention to terminate “without cause” the contract for the provision of rotary wing aircraft, equipment and services for heavy type aircraft - EC225.

MHS received the notice of termination while discussions between the parties regarding arbitration proceedings were ongoing, Boustead said.

Hengyuan To Invest US$160 Mln In Port Dickson Projects

Hengyuan Refining Company Bhd's (HRC) board of directors has given the approval for two projects costing a total of US$160mil or (RM684.5mil) at its refining complex in Port Dickson.

The refiner,  formerly known as Shell Refining Company (Federation of Malaya) Bhd, said on Friday the board approved the investment for a Euro 4M mogas plant.

The total investment cost for the project is US$135mil +/- 10% and it is expected to come on-stream by the second half of 2018.

The Euro 4M plant is an integrated complex to desulphurise the full range cat cracked gasoline produced by its long residue catalytic cracking unit (LRCCU).

It explained the design uses a combination of hydro-processing and liquid-liquid extraction technology.  The technology was used successfully by the Shandong Hengyuan Petrochemical Company Ltd in its Shandong based refinery and chemical complex which produces Euro 6 grade mogas.

Sumatec gets 25-year extension on Kazakhstan oil field mining lease

Kazakhstan Energy Ministry has expanded the oil and gas exploration area given to CaspiOilGas LLP (COG), which Sumatec Resources Bhd is in the process of acquiring for US$205mil (RM873mil), and extended its mining lease by up to 25 years.

Sumatec, which provides management and oversight of COG’s concession area (i.e. the Rakushechnoye oil and gas field in West Kazakhstan), said that COG planned to drill up to six more new wells within the field apart from the existing drilling plan proposed by Sumatec.

(Under the joint investment agreement signed in March 2012, Sumatec is entitled to 100% of the profit for the first two million barrels while from the third year onwards, the profit will be split 50:50 between Sumatec and COG.)

In a filing with Bursa Malaysia on Wednesday, Sumatec said COG’s general director Ruslan Keshubayev confirmed that COG had received an official letter from the Energy Ministry extending the exploration area within the Rakushechnoye lease allotment.

Sarawak govt to set up oil company for offshore oil and gas exploration - CM

The Sarawak government is planning to establish a state-owned offshore oil and gas exploration company in order to participate in the industry, said Chief Minister Datuk Amar Abang Johari Tun Openg.

He said the plan was discussed with national oil corporation, Petronas, which was very receptive to the idea of the state-owned company partaking in upstream and downstream oil and gas exploration activities.

“I had discussions with Petronas, we are adopting a new approach.

“Sarawak will participate in both upstream and downstream oil and gas activities.

“In the upstream sector, this will be Sarawak’s maiden venture, as such, we need to set up a state-owned company in order to join Petronas  in oil and gas exploration in the South China Sea.

Sapura Energy wins RM879mil O&G contracts

Sapura Energy Bhd has won contracts involving engineering, procurement, construction and installation (EPCI) works with a combined value of approximately US$205.96mil (RM879.01mil) from PT Gunanusa Utama Fabricators (PTG).

A stock exchange filing showed PTG as the main contractor and PTTEP International Ltd as the client for this project.

The subcontract works consist of EPCI of associated pipelines, transportation and installation of new offshore wellhead platforms, brownfield modifications of existing platforms and the installation of telecommunication and control system integrated to existing facilities.

More multinationals moving to Malaysia from Singapore, particularly in oil and gas sector

More multinational corporations, particularly in the oil and gas (O&G) sector, are moving their operations here from Singapore because of lower costs due to the depreciation of the ringgit.

“Over the the past two to three years, we have seen more multinationals with regional or significant operations in Singapore, relocating some of their departments or expatriates to Kuala Lumpur,” said ECA International regional director for Asia Lee Quane.

“Between 10 to 20 multinationals in the O&G sector moved significant numbers of expatriate staff from Singapore to Malaysia because benefits such as housing are much cheaper here thanks to the lower value of the ringgit,” he told.

Construction Of TNB's Large-Scale Solar Project To Start Next Month

Tenaga Nasional Bhd (TNB) is scheduled to commence construction of its first Large-Scale Solar project on a 97-hectare (ha) site in Mukim Tanjung 12, Kuala Langat, Selangor next month.

The land, which is being cleared in phases, will be developed into solar farms (68 ha), while the remaining is occupied by an existing high-voltage transmission line (29 ha), the electric utility company said in a statement today.

"Once completed and fully operational by November 2018, the project will generate and transmit 50 megawatt (MW) of electricity to the national grid," it said.

TNB's wholly-owned subsidiary, TNB Sepang Solar Sdn Bhd was awarded the project by the Energy Commission through a competitive bidding exercise.

Oil and gas (O&G) sector is on recovery - Maybank

Maybank Investment Bank Bhd opined that the oil and gas (O&G) sector has bottomed and is on a cyclical recovery.

“An accelerated rebalancing of global crude oil market (via supply cut by OPEC & non-OPEC members) will spur capex recovery. Our crude oil price assumption of US$55 per barrel average for 2017 is unchanged. Petronas’ RM60bil capex target for 2017 is another positive,” it said.

“On the domestic front, we are seeing a revival in upstream activities (i.e. rising drilling works), a positive. Tenders pipeline are also on the rise, of which most (i.e. OSV, maintenance) are back-loaded into 2H17,” Maybank said.

The research house said Petroliam Nasional Bhd (Petronas) 1Q17 YoY earnings rebound was positive but was expected, generally in tune with its peers

Sabah Shell files over RM4b counterclaim against unit of Petronas

Sabah Shell Petroleum Company Ltd (SSPC) has filed in a statement of defence and counterclaim (SDCC) of US$1.023 billion (US$1=RM4.279) against MISC Bhd's unit, Gumusut-Kakap Semi-Floating Production System (L) Ltd (GKL).

In a filing to Bursa Malaysia, SSPC refuted claims by GKL, a unit of Petroliam Nasional Bhd (Petronas), and is counter-claiming against GKL for alleged defective work and limited functionality of the Gumusut-Kakap Semi-Floating Production System, liquidated damages and a refund of the full amount paid to GKL under the adjudication decision rendered in the proceedings.

GKL commenced the legal proceedings seeking resolution on contractual disputes covering claims for outstanding additional lease rates, payment for completed variation works and other associated costs under the lease agreement dated Nov 9, 2012, between GKL and SSPC for the construction and lease of the Gumusut-Kakap Semi-Floating Production System (Semi-FPS) for production of crude oil.

Bumi Armada’s Q1 net profit more than doubled

Bumi Armada Bhd got off to a good start with its net profit in the first quarter ended March 31 improving to RM48.1mil, from RM23.4mil achieved in the same corresponding period last year.
Revenue for the international offshore energy facilities and services provider, however, came in 6.2% lower year-on-year (y-o-y) to RM404.2mil in the quarter.

At the floating production and operation (FPO) business segment level, revenues increased by 10.7% y-o-y, mainly from initial revenue streams relating to first oil and first gas on Armada Olombendo and Armada LNG Mediterrana respectively. However, the offshore marine services (OMS) segment saw a decline in revenue of 23.2%, due to a lower utilisation of the offshore support vessel fleet.

Barakah Offshore posts RM4.6m net loss in Q1

Barakah Offshore Petroleum Bhd registered a net loss of RM4.6 million in the first quarter (Q1) ended March 31, 2017, from a net profit of RM1.27 million in the previous corresponding quarter.

Revenue dropped 25.6% to RM76.84 million, compared with RM103.3 million in the same period last year, mainly due to lower revenue from installation and construction services (ICS).

In a filing with Bursa Malaysia, the group said ICS generated a total revenue of RM45.78 million, which is a decrease of 44.32% from the corresponding quarter.

Petronas okays Hibiscus’ purchase of Shell stake in Sabah venture

Petronas has given the go-ahead for partner Royal Dutch Shell to sell its (Shell’s) 50% stake in their joint-venture North Sabah enhanced oil recovery (EOR) project to Hibiscus Petroleum Bhd. However, the approval is subject to certain conditions.

Hibiscus told Bursa Malaysia that Shell’s units Sabah Shell Petroleum Co Ltd and Shell Sabah Selatan Sdn Bhd - which hold the combined 50% interest - were reviewing the conditions.

“If further clarifications are required from Petronas in respect of these conditions, these will be sought in due course and the company (Hibiscus) will make further announcements, if appropriate,” it said.

Hibiscus did not disclose the conditions imposed by Petronas.

Icon Offshore bags RM5.4m vessel provision contract

Icon Offshore Bhd has bagged a RM5.4 million contract to provide a 60-tonne bollard pull anchor handling tug supply vessel for Sarawak Shell Bhd and Sabah Shell Petroleum Co Ltd’s operations.

In a filing with Bursa Malaysia, Icon said the contract, clinched through its wholly-owned subsidiary Icon Offshore Group Sdn Bhd, is for a period of up to 10 months.

"The contract is expected to contribute positively to the earnings and net assets of Icon Group for the financial year ending Dec 31, 2017 and beyond. Notwithstanding this, the contract is not expected to have any material effects on the share capital and shareholding structure of Icon," it added.

KUB to spend US$80 mln on joint LPG terminal project

KUB Malaysia Bhd plans to spend up to US$80 million (US$1=RM4.295) under the memorandum of understanding (MoU) it entered into with Mabanaft Pte Ltd for the joint development of a refrigerated liquefied petroleum gas (LPG) terminal at Westport, Klang, Selangor.

Its President/Group Managing Director, Datuk Abdul Rahim Mohd Zin said the investment would entitle the group to have the majority shareholding of at least 51 per cent under the MoU.

“We need at least six months or until end of the year to undertake a feasibility study, and once we have determine that, we will make the financial investment decision,” he told reporters after the group’s annual and extraordinary general meeting here, yesterday.

Sarawak still negotiating with Petronas on increase in oil royalty

Sarawak has not abandoned its negotiation with Petronas for a 20% increase in oil royalty, Chief Minister Datuk Amar Abang Johari Tun Openg said.

In his winding up speech at the 18th Sarawak legislative Assembly sitting here, he said now the time is unfavourable for the negotiation as the price of oil is low and production cost very competitive.

"Under such a situation, we have to manage this with care," he said.

Meantime, he said in lieu of the loyalty increase, he had decided that the state would continue to pursue interests in the development of the oil and gas industry in the state.

Petronas Dagangan Records Stellar 1Q17 Results

Petronas Dagangan Bhd (PetDag) recorded a stellar first quarter pre-tax profit of RM335.6 million for the three months ended March 31, 2017 against RM295.6 million recorded in the same quarter last year.

Revenue rose to RM6.69 billion from RM4.91 billion previously, thanks to the 43 per cent increase in average selling price following the increase in Mean of Platts Singapore prices.

The selling prices, however, was offset by lower sales volume of four per cent, the petroleum products provider said in a filing to Bursa Malaysia.

The group's operating profit was higher by RM39.3 million to RM336.1 million, during the quarter under review, compared with the corresponding quarter last year on the back of better operating profits from retail and commercial segments which increased to RM198.80 million and RM132.20 million, respectively.

Dialog Group's Q3 earnings up nearly 20%

 Dialog Group Bhd's earnings rose 19.6% to RM94.40mil in the third quarter ended March 31, 2017, boosted by higher contributions from its joint ventures particularly the Pengerang Independent Terminals.

It said on Tuesday its revenue rose 42.4% to RM913.60mil from RM641.40mil a year ago. Its earnings per share were 1.74 sen and it declared an interim dividend of 1.2 sen a share.

Dialog Group said its share of joint ventures results in Q3 FY17 increased by 90.7% to RM28.6mil from RM15mil a year ago.

The Malaysia operation remained busy during the current financial quarter with engineering, construction and fabrication activities from various on-going projects such as the Pengerang Deepwater Terminal Phase 2, jetty topside works for Samsung in Pengerang and the construction of plasticiser plant for UPC Chemicals in Kuantan. 

UMW-OG bags RM151m contracts from Petronas Carigali

UMW Oil & Gas Corporation Bhd (UMW-OG) has received two contracts from Petronas Carigali Sdn Bhd worth US$34.81mil or RM151.07mil to provide services to its firm and optional wells.

UMW-OG said on Monday the contracts are to provide jack-up drilling rig services.

It said the first contract is to provide drilling rig services for Petronas Carigali’s drilling programme, whereby UMW-OG will assign its UMW Naga 3 for this contract.

The contract is to drill five firm wells with the option of drilling additional five wells, starting in June 2017.

PETROL refiners and distributors benefit from volatile oil prices

PETROL refiners and distributors have been one of the bright sparks on Bursa Malaysia in recent weeks.

Petron Malaysia Refining & Marketing Bhd and Hengyuan Refining Company Bhd (previously known as Shell Refining Company (Federation Of Malaya) Bhd, for example,have seen their shares rise by over 100% since the beginning of the year.

The market is of the impression that downstream players could benefit from a lower oil price environment as it can help stimulate demand growth and raise the sales of their products.

These companies have also benefitted from the oil price environment today which is not too high nor too low and prices have recovered when compared to the same quarter of the previous year.

Natural Gas – Flipping The Switch

by Investvine - May 2017

Our brand new free 54-page report NATURAL GAS: FLIPPING THE SWITCH – Dawn of a New Era takes a close look at the current state of the natural gas industry both in Malaysia and the wider Southeast Asia region, as well as worldwide. It aims at making people familiar with the features and benefits of natural gas as compared to other energy sources, namely coal and oil, deciphering common myths and examining and highlighting the advantages of natural gas in terms of energy efficiency, environmental impact and costs.

The report puts Malaysia’s natural gas policy in perspective to other countries in Southeast Asia, and also versus large energy consumers such as the US, China and Europe, highlighting worldwide trends, future projections and environmental consequences.

China firm to resume construction of oil terminal at Asia Petroleum Hub in Tanjung Pelepas

China Railway Engineering Corporation (CREC) has been awarded a contract worth US$400mil (RM1.8bil) for the construction of the oil terminal of the just-revived Asia Petroleum Hub (APH).

Smart Crest Sdn Bhd, which has an oil terminal at Westport, signed a framework agreement to award the engineering, procurement and construction (EPC) to CREC.

At the signing ceremony, Smart Crest’s chief executive officer Datuk Lim Kian Boon said the contract is worth US$400mil and Fajarbaru Builder Sdn Bhd will be the local joint venture partner in-charge of civil works.

“We have not defined the percentage of the joint venture yet, because the project is already 60% completed when I took over, so we are not sure how much local content is left,” Lim said.

Mega deal loss spells joy for UMW Oil & Gas

After abandoning a deal to create one of the largest oil and gas services providers in Malaysia, UMW Oil & Gas Corp. expects to return to profit next year with the return of full utilization of its drilling rigs.
   
Company President Rohaizad Darus said contracts have jumped, with rig utilisation climbing to 71 percent from 20 percent in the fourth quarter as oil firms operating in Southeast Asia resume spending on exploration and production.

Activity by state-controlled companies, including Petroliam Nasional Bhd., Indonesia’s Pertamina Persero PT and Thailand’s PTT Pcl is increasing, based on tender invitations the firms have received, he said.

“We are currently bidding for 35 tenders totaling 3.4 billion ringgit” ($783.1 million), Rohaizad said in a May 9 interview at the company’s Kuala Lumpur headquarters. “We hardly hit 20” at the same point last year.