Archive for March, 2010

Matrade Publication ( 4th Issue )

Wednesday, March 31st, 2010

 

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Shapadu directors emerge in Vastalux

Tuesday, March 30th, 2010

 

KUALA LUMPUR: Two directors with links to the Shapadu Group have been appointed to the board of beleaguered oil and gas counter Vastalux Energy Bhd.

Yesterday, Rosthman Ibrahim who is attached to Shapadu Corporation Sdn Bhd as group executive director, finance, was appointed non-executive director in Vastalux, while Mohamad Hasif Mohd Nahar who left Shapadu Energy and Engineering Sdn Bhd late last month was appointed to the board of Vastalux in an executive position.

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alaysia Securities yesterday also showed that Mohamad Hasif had acquired 23.9 million shares representing an 11.6% stake in Vastalux Energy, buying over the block of shares from Mohamad Nor Abdul Rashid, who ceased to be a substantial shareholder.

Vastalux had run into problems when its licence as a full-scale main contractor to state-controlled oil and gas major Petroliam Nasional Bhd (Petronas) was suspended in January this year.

For FY2009, Vastalux suffered a net loss of RM51.4 million on the back of RM190 million in revenue. Shapadu Group has interests in transportation, oil and gas, construction, toll highways and marine services and trading, among others.

Vastalux ended trading unchanged at 13.5 sen yesterday.

This article appeared in The Edge Financial Daily, March 30, 2010.

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Esso Malaysia shares jump, says unaware of privatisation

Tuesday, March 30th, 2010

 

KUALA LUMPUR:

ESSO MALAYSIA BHD [ ] said on Tuesday, March 30 it is unaware of an article that ExxonMobil is mulling to take the former private.

Esso Malaysia said after having

made due enquiries, it was not aware of any plans by ExxonMobil to tak

e it private as stated in a local newspaper report.

It also said while there was some movements in its share price in the morning session, it was unaware of any reasons except for the news report.

"Esso Malaysia wishes to also announce that there have been no undisclosed developments which would account for the apparent unusual market activity," it said.

The shares rose 22 sen to RM2.73 with 668,500 shares done at midday .

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Petronas says ‘biggest’ oil find unlikely

Monday, March 29th, 2010

 

KUALA LUMPUR, March 24 — Exploration activities conducted by Petroliam Nasional Bhd for more than 100 years in the country, have shown that it is unlikely to find oil fields which are world-sized or world class, the national oil company says.

Refuting recent claims by Gua Musang MP Tengku Razaleigh Hamzah that Petronas had made a “very big discovery of an oil field, probably the biggest in the world”, a company official said that available technical data showed that such discoveries were unlikely to take place both in Malaysia and the region.

“We can continue to find small and medium sized fields in the region, but we don’t hope to be able to find world scale discoveries,” Petronas Vice President for exploration and production business, Ramlan A. Malek, told a media briefing here today.

He said that in the past, exploration had been conducted and focused in shallow water and onshore areas, with the remaining shallow water prospects considered small and medium-sized.

“The focus now is within deepwater and deeper reservoir, of which significant sized prospects remain and are yet to be fully explored but that require huge investment and technology breakthrough,” he said.

Ramlan said Petronas oil and gas exploration activities were conducted in three areas — onshore Sarawak; shallow waters off Terengganu, Sabah and Sarawak; and deepwater areas mainly in Sabah and Sarawak.

Most of the wells drilled are in shallow waters, while shallow and onshore areas are considered matured areas as they had been well explored in the past, he said.

Recent findings in shallow waters were of medium to small sized, he said.

“There are bigger finds in the deep waters, and we are still exploring. These are in the region of 50 to 500 million barrels. We don’t consider this size to be world class or extensive tracts of oil.

“It is the general view that the world-sized field is five billion barrels or more. A billion barrel is big, but not world size. Similarly gas fields, we continue to discover fields of small to medium sizes,” he said.

He said the latest oil find, which is of world size is in the deep waters of Brazil, with a production of 528 billion barrels of oil, which is 10 times the size of the oil field discovered in Malaysia or in the region so far.

Going forward, he said Petronas will focus on deep water exploration.

To date, Petronas had made two oil discoveries — in deep waters of Kikeh, in Sabah in 2002, with production in late 2007; and Gumusut/Kakap in offshore Sabah in 2004, with the field targeted to produce oil in late 2011.<

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“We continue to drill an average of 30 wells per year. However, based on technical data, we don’t expect to find a world-sized discovery,” he said.

On claims by Tengku Razaleigh that the “big discovery” could depress the oil price, Ramlan said many factors affected the global prices, such as demand and capacity. “In our view, we are not in a position influence prices.”

He said Malaysia’s current oil production of 600,000 barrels per day, is less than one per cent of the total world oil production.

“This will not likely affect global crude oil prices as there are many influencing factors.”

On execution of projects, he said decisions were based on technical and commercial consideration by Petronas.

On exploration activities abroad, he said that even in Petronas’ areas of operation, such world-sized oil field had not been discovered.

At present, Petronas operates in 30 countries, among others Sudan, Ethiopia, Cuba and Mozambique.

“We will participate as a minority equity partner in Greenland, which is north of Canada and Norway,” Ramlan said.

He also said that there was no question of Petronas hiding the facts from the public. He said exploration and production activities carried out in Malaysia were based

on proposals submitted by its production sharing contractors (PSCs), as agreed by Petronas.

“A review of results and progress are well reported to various stakeholders, internally within Petronas through management committee and board of directors discussion,” he said.

Externally, he said, Petronas reports to the government via periodical reporting, that is to the Prime Minister monthly, quarterly report to the Malaysian Industrial Development Authority (MIDA) and annual statistics survey by Bank Negara and the Statistics Department.

“PSCs which are mostly international players are also obligated to report their activities to their shareholders or regulatory bodies. Exploration activities involved many parties including service companies and any results would be known by most parties.”

Despite the average sized of fields found, he said, Malaysia continued to attract foreign investors, and “our achievement and progress in exploration has been quite healthy”.

“We continue to promote exploration in this country and continue to have encouraging interest by other international oil companies.”

There are a total of 74 PSCs in Malaysia.

Said Ramlan: “We are still positive as far as exploration activities are concerned. They (foreign oil companies) are also aware what size can be expected to find in this country based on the data.” — Bernama

  

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Sinopec sees higher crude in 2010, Q4 net up 48pc

Monday, March 29th, 2010

 

HONG KONG, March 28 — Sinopec, Asia’s top oil refiner, forecast higher crude prices in 2010 and said more refining capacity in China would stiffen competition, as it posted its worst profit in three quarters due to weak refining margins.

Although Sinopec’s fourth-quarter profit beat expectations, its results reinforced a dismal theme across the sector, dragged down by higher crude prices and low state-capped fuel prices.

Its rival PetroChina said Beijing could delay fuel-price hikes as it posted a lower-than-forecast 12 per cent rise in quarterly profit..

Sinopec, China’s biggest refiner, will continue to struggle in the first half of 2010, as Beijing procrastinates on fuel price hikes for fear of stoking inflation, analysts say.

“Following the recovery in the global economy, international oil market demand has recovered. It is expected that in 2010, the level of crude prices may be higher than in 2009,” Sinopec said in a statement to the Shanghai stock exchange.

Sinopec said that with new capacity from refining and petrochemical businesses coming on stream, market competition remains keen.

In 2010, Sinopec is targeting domestic crude oil production at 44.52 million tonnes. It aims to process crude oil of 203 million tonnes and to sell 129 million tonnes of refined products domestically.

Total capital expenditure will amount to 112 billion yuan, with a

bout half going to exploration and production, nearly unchanged from 2009 levels.

Crude oil prices climbed nearly 30 per cent in the fourth quarter from a year earlier. While that boosted profits at Sinopec’s exploration unit, China’s second-largest, it sliced the firm’s refining margins as Sinopec buys more than 70 per cent of its crude on the global market.

Besides

more fuel price hikes, Sinopec will be banking on a faster rise of the yuan in 2010, which would reduce the cost of imported crude.

For Sinopec investors, the fourth-quarter results are depressingly familiar, as the firm was crippled by refining losses in 2008 due to soaring crude prices and low state-capped fuel prices.

Sinopec’s net profit totalled 14.68 billion yuan for October-December, compared with a restated 9.89 billion yuan last year, according to a statement to the Shanghai Stock Exchange, using international accounting standards.

Analysts had expected a profit of 10.4 billion yuan, according to estimates compiled by Thomson Reuters.

Sinopec said in a separate statement that its board had proposed to issue A-share convertible bonds that could total up to 23 billion yuan (RM11.5 billion)..

But for the most of 2009, Sinopec, led by Chairman Su Shulin, benefited from lower crude prices and Beijing raising retail fuel prices five times. The government last raised gasoline and diesel prices by 7 per cent in November.

Shares in Sinopec have fallen about 7.8 per cent this year. PetroChina’s have lost about 6.1 per cent.

Shares in CNOOC, which reports on March 31, have risen 3.3 per cent. — Reuters

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Alam Maritim secures RM39.96m contrac

Saturday, March 27th, 2010

 

KUALA LUMPUR: ALAM MARITIM RESOURCES BHD []'s unit has secured a RM39.96 million contract to provide an accommodation v

essel.

It said on Friday, March 26 its unit Alam Maritim (M) Sdn Bhd was recently awarded a contract by an established oil major to provide the vessel for three years with two extension options of one year each.

Alam Maritim said the contract started on March 1 and contract value at RM39.96 million, based on the primary period only, is expected to contribute positively to the earnings and net assets for FY ending Dec 31, 2010 and beyond.

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Petronas denies Biggest oil field find

Thursday, March 25th, 2010

 

KUALA LUMPUR: Petronas has strongly denied reports that it has made a big discovery of an oil field which is said to be one of the biggest in the world.

“We adopt a well-established reporting process whereby we make progress report to the board and stake holders as well as to the Government.

“There is no way we are hiding any information

with regards to the discovery as we have no intention to hide any news,” exploration and production business vice-president Ramlan A Malek told a media briefing yesterday.

He added that an announcement would have already been made if the company had found a big oil field.

Former Petronas chairman Tengku Razaleigh Hamzah had reportedly claimed that Petronas had discovered a huge tract of oil reserve that could significantly reduce oil prices.

Razaleigh said it was the prerogative of the Prime Minister to give Petronas the green light to start extracting oil from newly-discovered fields.

To this, Ramlan said although the company di

d not rule out the possibility of discovering a huge oil field in the future, it was unlikely to find such an oil field in the country.

“At this moment, there are no announcements of huge oil field discovery in this region. The most recent discovery was in Brazil of a huge oil field that can produce about five to eight billion barrels,” he said.

He added that Malaysia’s current oil production of about 600,000 barrels per day was just a fraction of the total world oil production and this would unlikely affect global crude oil prices.

For future plans, Ramlan said Petronas would venture into deep-water reservoir exploration in the country.

“This will involve a huge amount of investment as we are dealing with quite a challenging environment. An average investment to drill in shallow water is about US$10mil (RM33.2mil) but for deepwater it can go up to as high as US$100mil (RM333.2mil),” he said.

Ramlan said Petronas would continue to drill an average of 30 wells per year in Sabah, Terengganu and Sarawak.

The country’s oil reserves can last until 2017 if there is no new discovery.

Apart from local exploration and production, Petronas has operations in 30 other countries as equity partners with some major international oil and gas players.

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Malaysia a ‘heartland’ for Shell

Monday, March 22nd, 2010

 

LONDON: Shell’s plans to cut 15% of refining

capacity and 35% of retail markets as well as to trim jobs will not affect Malaysia which is a “heartland” for Shell, said its CEO Peter Voser here.

“When we talk about going out of markets, we are talking really about small markets. I wouldn’t consider Malaysia as being a small market for us.

“I look at the integrated picture because we are big in upstream, big in gas energy, we have our GTL (gas-to-liquids) plant there, we have our refinery, so Malaysia is a heartland for Shell, has always been and will always be,” he said here last Tuesday.

“On the retail side, I have to say this very proudly, that in a Petronas market, we are actually quite recognised as a strong retail and lubricants brand. So, we are very happy with our presence in Malaysia,” he added.

Shell is a contractor to national oil company Petronas under production-sharing contracts in upstream operations. Downstream, Shell has over 900 petrol stations in Malaysia, a refinery in Port Dickson which Voser described as “very successful”, and a GTL plant in Bintulu, Sarawak.

The pilot-scale Bintulu plant is the world’s first commercial GTL plant of its type and provided Shell with technology and experience to build a new plant in Qatar that will be the world’s largest GTL plant.

Voser says Shell is proud to be recognised as a strong retail and lubricants brand in a Petronas market like Malaysia. Photo by BloombergVoser says Shell is proud to be recognised as a strong retail and lubricants brand in a Petronas market like Malaysia. Photo by Bloomberg

Voser, who took over as CEO in July last year, was speaking to a group of about a dozen journalists from Asia-Pacific and Europe during Shell’s annual Strategy Day in London. He had earlier held a briefing for a larger group of media on Shell’s plans to sharpen its performance and reduce costs, including selling down non-core positions.

The plans include job

cuts. Over the 2010-2011 period, Shell will shed about 2,000 jobs, mostly in downstream and corporate functions. This will take the total number of job cuts between 2009 and 2012 to 7,000, about the same number of employees Shell has in Malaysia.

Voser, however, said the job cuts would not affect Malaysia. In fact, he said Malaysia would benefit because it was one of Shell’s offshoring centres.

“We’ve got 2,000 people in service centres in Malaysia alone. And therefore, we are bringing work either from within Asia or from other parts of the world into Malaysia,” he said.

The offshoring work includes back-end financial services, IT, human resources and recruitment. Voser said Shell also had two hubs on the engineering side — one in India and the other in Kuala Lumpur.

Shell has also set up a deepwater engineering office in Kuala Lumpur which provides technical expertise for deepwater exploration in Malaysia and the region.

The Gumusut-Kakap field in waters up to 1,220 metres offshore Sabah is Shell’s first deepwater venture in the country. Shell, the operator, and ConocoPhillips Sabah Ltd each holds 33% stake in the development, while Petronas Carigali has 20% and Murphy Sabah Oil 14%.  

With regard to the Gumusut deepwater project, Voser said Shell had brought in its specialists from Houston to effect the transfer of soft skills to Malaysians.

Together with Petronas, Shell is also exploring the viability of enhanced oil recovery (EOR) in Malaysia to extend the life span of existing oil fields.

“It’s too early to give you details but these (deepwater exploration offshore Sabah and EOR) are high on our priority list,” said Voser.

On biofuels, part of Shell’s alternative energy portfolio, he said the company had no plans to go into biofuels in Malaysia using palm oil.

“At this stage, I would actually pretty much rule out going into palm oil because we are concentrating on sugar ethanol and on our second-generation [biofuel project in Brazil],” he said.

Last month, Shell announced that it had signed a non-binding MoU to form a US$12 billion (RM40 billion) joint venture with Cosan SA of Brazil to manufacture biofuel from sugar cane.  

This article appeared in The Edge Financial Daily, March 22, 2010.

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Pursuing a better energy sector

Monday, March 22nd, 2010

 

Malaysia must address its energy security issue to support the economy towards a higher growth trajectory

THE domestic energy landscape has changed considerably over the years. From being an energy-rich country a decade ago, Malaysia will soon be joining other countries that have to rely on imports to meet domestic demand.

Hence, energy security is a crucial issue that needs to be addressed to support the economy towards a higher growth trajectory. A holistic approach addressing the issues of energy supply, demand and pricing needs to be undertaken.

Prior to 1970, Malaysia imported virtually all its petroleum requirement. Following the Government’s conscious effort in the 1970s to develop petroleum resources, Malaysia has become a significant player and net exporter of petroleum products.

Major discoveries made in 1970s and 1980s provided the impetus not only to develop our own resources, but also to add value to these resources. Since its inception in 1974, Petroliam Nasional Bhd (Petronas) has been entrusted with the orderly development of national petroleum resources. The Petroleum Development Act 1974 vested Petronas with the entire ownership and exclusive rights of exploring and obtaining petroleum whether onshore or offshore of Malaysia.

Since then, massive investments and re-investments have been made to develop Malaysia’s petroleum industry. These include the development of refinery complexes in Malacca, liquefied natural gas complex in Bintulu, integrated petroleum and petrochemical complexes in Kertih and Gebeng, petrochemical plants in Labuan, Bintulu and Gurun, as well as integrated development of upstream and downstream gas supply infrastructure throughout Peninsular Malaysia. These deliberate efforts were based on long-term planning.

Malaysia’s oil reserves of about 5.5 billion barrels are relatively small compared with those in Saudi Arabia (260 billion barrels), Iran (138 billion barrels) and Iraq (115 billion barrels). Likewise, Malaysia’s gas reserves of 88 trillion cu ft (tcf) are much smaller in comparison with Russia (1,680 tcf), Iran (1,046 tcf) and Qatar (900 tcf).

For the longer term, maintaining the present level of oil production of about 660,000 barrels per day could be challenging. Over the years, our geological structure has matured. All major discoveries have already been developed and in production for more than 30 years. In fact, our oil and gas reserves are now depleting. In the case of gas, production is declining at about 10% per annum.

In addition, the remaining oil and gas fields are of lower quality due to high carbon dioxide content. The development of these fields will be more challenging due to the physical nature of the fields which are relatively small in size, scattered and far away from the existing production facilities.

Therefore, the cost of developing future resources will be much higher and may not be economically feasible. Moving forward, the nation will be increasingly dependent on imported petroleum. In fact, about 25% of gas supplied to the domestic market is now imported.

Besides petroleum, Malaysia has some coal deposits, mainly in Sabah and Sarawak. However, due to remoteness and quality factors, only a small percentage of local coal is being mined while a sizeable amount is imported to meet the requirement for power generation. Large hydro resources have also been developed over the years throughout the country but there remains some potential for future development.

Renewable sources of energy are also abundant in Malaysia, the significant ones being biomass, biogas and solar. The development of mini and micro hydro still remains potentially attractive in certain parts of the country. Although renewable energy has a promising future, it requires some time before its full potential can be unleashed. Based on this scenario, Malaysia is projected to be a net importer of energy by 2019.

As in any developing nation, energy consumption per capita in Malaysia is still low

but is expected to expand at a rapid rate in tandem with economic development. Energy intensity with respect to gross domestic product has over the years also shown an increasing trend.

In terms of source, petroleum products constituted about 54% of energy demand in 2008 followed by natural gas (24%), electricity (18%) and coal and coke (4%) (see Chart 1).

In terms of demand by sector, the industrial sector dominated the energy use with 43% share, followed by transport (36%), residential and commercial (14%), non-energy use (6%) and agriculture (1%) (see Chart 2). In terms of volume, consumption increased by 51.2% from 29,699 kilo tonnes of oil equivalent (ktoe) in 2000 to 44,901 ktoe in 2008.

The transport sector was the main user of energy in 2000. However, in 2008, the industrial sector accounted for 43% of the total energy consumed, surpassing the transport sector at 36%. The main types of energy consumed by the transport sector were petrol and diesel. For the industrial sector, the main forms of energy used were gas and electricity. While the growing demand by the transport sector was matched by supply, industrial sector demand for gas increased at a much faster pace compared with supply.

The situation is especially perturbing in Peninsular Malaysia as more industry players, including those producing low value-added products, are switching to gas to make quick savings from a much cheaper gas price. Should we allow this to continue? And are we being fair to those industries which do not have access to piped gas? Attempts to address the gas supply shortage by temporarily re-allocating 100 million standard cu ft per day (mmscfd) of gas from the power

sector to the industrial sector in 2009 has only enabled a fraction of the new demand being met. It is projected that an additional 100-200 mmscfd of gas is required every year until 2015 if demand for gas is to be met (see Graph 1).

Energy market in Malaysia is highly distorted. While petroleum products such as petrol and diesel are linked to market prices, gas prices and electricity tariffs are regulated by the Government.

Energy prices have also been used as a means to extend assistance to selected groups and to attract foreign direct investments. This is untenable. Such practices have also led to non-optimal allocation of resources and a host of other ill effects. For instance, the capping of gas prices below market level has caused a surge in demand for gas, particularly from industries. Although gas prices have been revised twice since 2008, the substantial difference between the regulated and “market” prices remained wide.

The temporary re-allocation of additional gas (in 2009) from the power sector to the industrial sector saw industries queuing to obtain gas either for expansion of existing operations or starting new ones. By March 2010, the additional gas to the industries has been snatched up.

Efforts to bring additional gas supply from abroad may be challenging and may not be attractive to industry players. How could we attract new gas suppliers – importing at higher market prices and yet selling at subsidised prices? Hence in meeting increasing demand as well as attracting new suppliers, the gas pricing-related issues need to be addressed.

We need to remind ourselves that our oil and gas resources are finite and non-replaceable. What we inherited from the earlier generation is also meant for the generation after us as they too have equal rights to these resources.

The era of cheap oil and gas is over. We need to accord proper value to our resources. Hence, for the future, gas should be utilised by strategic industries to produce high value-added products. Our domestic resources are depleting yet we are still selling them at subsidised rates. The nation needs to wean itself from subsidies. The longer we delay the move to market-based pricing, the more profound its impact on us later.

To entice more gas supplies to Peninsular Malaysia, gas prices have to transition in such a way that it could incentivise others to import. Indeed, optimal allocation of resources is best left to market forces to determine. Nevertheless, fair competition among industry players needs to be ensured.

Assistance to target groups, especially low-income groups and highly-promoted industries, needs to be extended in other forms besides energy prices. A new mechanism should be institutionalised to ensure that only selected target groups receive this assistance. Cash rebates and other fiscal incentives are options that could be considered for this purpose.

 

  • The writer is director-general of the Economic Planning Unit, Prime Minister’s Department.
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    Wah Seong bids for RM5.3b jobs and Socotherm assets

    Monday, March 22nd, 2010

     

    KUALA LUMPUR: Wah Seong Corporation Bhd (WSC), which is vying to acquire the world’s second largest pipe-coating firm, is bidding for some RM5.3 billion jobs in Southeast Asia, China and Australia to replenish its current order book of some RM1.4 billion.

    The company had also submitted a bid to acquire the entire assets of troubled Italian pipe-coating company Socotherm SpA three weeks ago.

    WSC managing director and group CEO Chan Cheu Leong said it had tendered for jobs that included major pipe-coating projects in Malaysia, Thailand, Vietnam, China and Australia.

    He said WSC, which is controlled by IGB Bhd’s Tan family, was expected to ride on the increase in the oil and gas activities in the second half (2H) of the year.

    Chan

    “This is due to the increasing demand for gas in Asia and with improvement in crude oil price, major oil and gas infrastructure projects that had previously been in planning stages or deferred are now being activated,” he said at a media briefing on the progress of the company and the unveiling of its new logo here yesterday.

    Out of WSC’s RM1.4 billion order book, about 60% is related to pipe coating, including the Chevron Australia Gorgon project worth some US$162.9 million (RM537.6 million). The rest are from engineering and cargo-based work and building material businesses.

    WSC deputy MD Giancario Maccagno said the outcome of its bid to buy Socotherm, the world’s second largest pipe-coating firm, would be known by the end of next month.

    He said the company was “confident” of a successful acquisition as it had the business know-how, a strong cash reserve of over RM400 million and a low gearing of 0.3 times. Noteworthy is that Maccagno was also a former employee of Socotherm, which is currently in the midst of a debt restructuring.
    Although no acquisition price was disclosed, based on the size of WSC, he said the company could “swallow” acquisitions that cost between RM300 million and RM500 million.

    Maccagno added that the acquisition had to be sizeable enough to enhance its core business or

    to become another core business of WSC and contribute to the group’s income.

    He said it was also in talks with Orleans Group to buy a 60% stake in the latter’s

    Nigerian pipe-coating business which was acquired from Socotherm.

    In a note yesterday, Kenanga Research said it would still be positive on WSC if it opted for a “technical assistance” partnership with Orleans instead of an equity acquisition, as it would mean that country’s risk was significantly mitigated.

    According to a Reuters report in January, Socotherm, which specialises in coatings for petrol, gas and water pipes, filed for creditor protection late last year.

    The report cited that in the first half of the year, Socotherm reported a net loss of €57.2 million (RM260 million), widening from €14.9 million a year earlier.

    However, Maccagno said during the good days, Socotherm was a thriving company making some €300 million in revenue yearly.

    He noted that about US$170 billion was expected to be spent on deepwater exploration and production in the next five years, of which 75% would be invested in West Africa, Brazil and the Gulf of Mexico.

    Acquiring Socotherm, which has a large presence in those regions, would position WSC to tap into the US$127 billion exploration market.

    Maccagno said merger and acquisition was an important growth strategy for WSC, which derives about 15% of its yearly revenue growth from new acquisitions.

    On its ongoing rebranding and restructuring exercise, Chan said 25 of its subsidiaries would be placed under six very distinct divisions: pipe coating, pipe manufacturing, engineering, renewable energy, trading and exploration and production services.

    The six divisions would be parked under Wasco Energy, which in turn is a 100% subsidiary of WSC.

    “This (restructuring and rebranding) is a very important exercise for us as the move will allow WSC to be more focused and meet our vision of developing and managing a world-class and profitable, integrated energy infrastructure group,” said Chan.

    WSC is currently one of the analysts’ darling stocks in the oil and gas sector and is trading at a trailing price-to-earnings ratio of 15.44 times.

    Since February, the counter has had six buy, three outperform, three hold and two neutral calls. Target price consensus is RM2.96 per share.

    Chan opined that it was perhaps timely for WSC to be recommended an upward re-rating, given its potential growing order book and acquisitions.

     

     

     

    This article appeared in The Edge Financial Daily, March 18, 2010.

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