Sapura expects more jobs on top of US$14.3b already in prospects
Date: 1.02.2019.

Publication Source: New Straits Times

Sapura Energy Bhd is seeing more jobs in the horizon in addition to the US$14.3 billion already in prospects this year despite a sharp decline in oil price to below US$60 a barrel.

The integrated oil and gas services company, which has presence in over 20 countries, believes the current oil price level will not put a brake on contract flows in the years to come.

Sapura Energy president and group chief executive officer Tan Sri Shahril Shamsuddin said oil majors as well as independents and national oil companies were expected to continue with their exploration and production (E&P) activities to maintain production at current levels.

“At this current price level, it is enough (for E&P players) to make projects viable and earn margins. The current oil price is not really a concern for us. We are comfortable with the current level,” Shahril said after the company’s extraordinary general meeting here.

“(For oil and gas service contracts), hopefully we will win more next year. Yes, there will be more jobs next year by the oil majors, independents and national oil companies,” he added.

Other than providing oil and gas services to national oil companies or oil majors, Sapura Energy is also involved in E&P activities.

For its oil and gas services segment, it has tendered for US$14.3 billion worth of jobs this year.

The firm will find out if it wins any of them in the next six to 12 months.

As of today, the firm had secured US$8.8 billion worth of work, which will keep its earnings sustained for the next three years.

Oil price, which is now trading at US$60 a barrel, has been affected by the trade war between the two largest economies, United States and China.

However, oil majors were reportedly still spending albeit with capital discipline as they saw growth in certain regions such as Africa, Asia and Latin America.

Meanwhile, Shahril said the under-subscription of its rights issue exercise was due to unfavourable investors' sentiment.

"I think the sentiments during the rights issue was a bit muddled because there were so many conflicts. There was conflict between US and China and globally on trade that caused a lot of foreign investors to be a bit shy and local investors too.

"Institutions held back because they were uncertain of the industry's recovery. Unless you are in the business, you cannot see the pick-up in activity in the sector," he said.

However, Shahril said the emergence of Permodalan Nasional Bhd as its largest shareholder was a testament to the firm's growth potential.

Meanwhile, Sapura Energy shareholders have given the nod for the group's joint venture with OMV Aktiengesellschaft.

OMV is buying a 50 per cent stake in Sapura Upstream Sdn Bhd for total proceeds of US$975 million (RM4 billion).