Dayang considers going into development of marginal oilfields
9 June 2012
KUCHING: Dayang Enterprise Holdings Bhd, a service provider to the oil and gas industry, may venture into marginal oilfield development if the prospects are good.
Managing director Tengku Datuk Yusof Tengku Ahmad Shahruddin said the company would carry out thorough evaluations and seek guidance before deciding whether to participate in risk service contracts (RSC) for the development of marginal oilfields.
“We are currently not embarking on any study yet for marginal oilfields,” he told StarBizWeek.
Tengku Yusof said it was imperative that any decision made on the matter was with the betterment of the company in mind, setting the direction for years to come.
Petroliam Nasional Bhd (Petronas) plans to develop 25% or 27 of the 106 marginal oilfields in Malaysia which are reported to collectively contain 580 million barrels of oil equivalent.
The marginal oilfields would be put in clusters of four or five fields each for development.
In January last year, Petronas awarded the first RSC, involving two clusters of marginal oilfields Sepat and Berantai to a consortium comprising London-listed Petrofac Energy Development Sdn Bhd, Sapura Energy Ventures and Kencana Energy Sdn Bhd.
The second RSC to develop the Balai cluster oilfield, offshore Sarawak, was awarded to another consortium comprising Petronas Carigali Sdn Bhd, Dialog Group Bhd and Australia-listed ROC Oil last August.
Petronas president and chief executive officer Datuk Shamsul Azhar Abbas had said recently that it was expected to award the next round of RSCs by July.
Tengku Yusof said with a cash pile of nearly RM218mil (at end-2011), should help Dayang to venture into any new areas of business, like marginal oilfield developpment if the prospects were encouraging, and to pursue acquisitions.
He said the new incentives, like a reduction of petroleum income tax rate to 25% from 38%, a waiver of export duty on oil produced and exported from marginal field development, should spur the development of such oilfields.
Dayang has ongoing contracts worth some RM1.5bil that could last until 2016.
The single largest contract valued at RM802mil for topside structural maintenance was secured from Petronas Carigali last year.
“Our immediate priority lies in replenishing our order book,” said Tengku Yusof.
With Petronas revising upwards last year its planned capital expenditure for the development of offshore facilities to RM300bil from RM250bil over the next five years, Tengku Yusof said there could possibly be many jobs or recurring contracts worth more than RM5bil which Dayang could bid for and win.
This year, Dayang has secured two contracts - RM85mil for its workboat MV Dayang Zamrud with Brunei Shell Petroleum Company for five years and RM125mil for topside maintenance from Talisman Malaysia Ltd.
“We forsee our company being kept busy over the next few years with plenty of job opportunities,” he added. Besides, he noted that Petronas and Shell had recently signed two production sharing contracts, opening the door to US$12bil worth of enhanced oil recovery investments over the next 30 years.