EXCLUSIVE CONTRACTS: These contracts, which reopen for tender every five years,
will give maintenance operators the exclusivity to service Petronas Carigali Sdn Bhd’s
offshore platforms located in the peninsula as well as the East Malaysian region.
Dayang Enterprise Holdings Bhd (Dayang) is in a good position to secure some of Petroliam Nasional Bhd’s (Petronas) RM1.2 billion maintenance contracts that were open for tenders, particularly for the estimated RM800 million Sabah and Sarawak operations.
"Dayang is the incumbent for the existing five-year maintenance contract with its 19-year track record speaking volumes of its capability as a maintenance operator," said Hwang DBS Vickers Research Sdn Bhd (HwangDBS Research) analyst Lee Wee Keat when contacted by The Borneo Post yesterday.
"More importantly, the fact that it has its own workboats, which are assets required for the work, gives it a competitive edge over its peers," he pointed out.
These contracts, which reopen for tender every five years, would give maintenance operators the exclusivity to service Petronas Carigali Sdn Bhd's offshore platforms located in the peninsula as well as the East Malaysian region.
The five-year contract was valued at RM1.2 billion with a possibility of rising as addon works might be required in later stages.
Only a handful of technically-qualified operators were in the running for these contracts, namely Dayang, Vastalux, Shapadu Energy & Engineering, Sarku Engineering and Petra Energy Bhd.
Currently, Dayang' s outstanding order book stood at RM1.1 billion or 3.5 times of the fi nancial year 2010 forecasted revenue cover.
"We are not expecting the entire contract to be secured by Dayang, although that would be a positive surprise," added the analyst. "We are only factoring the Sabah and Sarawak portion that is estimated to be worth around RM800 million which we believe it has the highest chance of success.
"By then, a fraction of the current RM1.1 billion order book would have been consumed. So, assuming that it doesn't secure any more contracts until the RM800 million Sabah and Sarawak maintenance contract, a ballpark order book figure would be approximately RM1.6 billion after taking into consideration the burnout rate of the order book.
"Currently, Dayang is roughly servicing 309 offshore structures or platforms, four single buoy mooring (SBM) systems, and one fl oating production,
storage and offloading (FPSO) facility in the Sabah and Sarawak waters," added the analyst.
According to the research analyst, Petronas called for tenders for the maintenance of its offshore platforms last month. This tender was expected to close at the end of June this year and the award would be given in the next six to nine months.
Petronas aimed at boosting its domestic investments by focusing on improving and prolonging extraction from existing oil wells. Accordingly, HwangDBS Research expected Petronas' domestic capital expenditure to continue to rise in the near future.
