KUALA LUMPUR: SapuraCrest Petroleum Bhd has secured a massive US$1.4 billion (RM4.35 billion) contract from Petróleo Brasileiro SA (Petrobras) for the charter and operations of three pipe-laying support vessels (PLSV), the single-largest contract by value that the group has won in recent years.
In an announcement to Bursa Malaysia yesterday, SapuraCrest said the contract is expected to generate revenue for the group by the fourth quarter of 2014.
It is also anticipated to “contribute positively” to the group’s earnings and net assets for the financial year ending Jan 31, 2015 and beyond, SapuraCrest said.
SapuraCrest said its wholly-owned subsidiary TL Offshore Sdn Bhd will construct two PLSVs outside Brazil and the other will be built in Brazil.
TL Offshore will be tasked with project management, procedures and operations of the PLSVs for Petrobas. The vessels will be deployed to perform oil and gas (O&G) marine construction projects in Brazilian waters.
SapuraCrest executive vice-chairman and president Datuk Seri Shahril Shamsuddin said in a statement the group’s entry into the Brazilian market is part of its long-term global expansion strategy.
“This contract is a significant milestone as it marks our entry into the vast, dynamic yet technologically challenging O&G market in Brazil. It is a definitive acknowledgement of SapuraCrest as a global player,” Shahril said.
Petrobras is a public-listed company in which the Brazilian government holds a majority stake.
The mega award comes in the midst of SapuraCrest’s merger with Kencana Petroleum Bhd via Integral Key Sdn Bhd, a special purpose vehicle established by Mayban Ventures Sdn Bhd.
Announced on July 11, the proposed merger values SapuraCrest at RM5.87 billion and Kencana at RM5.98 billion, with shareholders of the respective companies to get cash and Integral Key shares if they choose to accept the offer.
The merged entity will create the world’s fourth-largest integrated O&G services provider.
While the latest US$1.4 billion award provides a big boost to SapuraCrest’s future earnings, industry observers have raised questions if Mayban Ventures’ proposed merger of SapuraCrest and Kencana has undervalued SapuraCrest.
“Although the terms of the merger would more or less be fixed, it is debatable whether the deal gives enough weight to SapuraCrest’s tender book and future earnings potential,” said one industry observer.
Since the proposed merger was unveiled on July 11, SapuraCrest has secured several contracts with a combined value of RM5.16 billion.
To recap, SapuraCrest’s 50%-owned associate, Labuan Shipyard and Engineering Sdn Bhd, on Sept 30 was awarded a RM99.5 million shipbuilding contract from Tanjung Offshore Bhd.
On Sept 22, SapuraCrest’s unit TL Offshore was also awarded a US$227 million contract to construct two pipelay cum heavylift offshore construction vessels for Cosco Nantong Shipyard Co Ltd.
Kencana has yet to announce any new contract secured since July when the proposed merger with SapuraCrest was announced.
Earlier this year before the merger deal was struck, Kencana’s unit, Kencana HL Sdn Bhd, was given contracts worth over RM539 million.
These included a RM115 million contract from Petrofac E&C Sdn Bhd to construct a mobile offshore production unit and well head support structure for the Sepat early production system off the coast of Terengganu and a RM208 million job for the fabrication of a Kebabangan substructure for the Kebabangan northern hub development project off the coast of Sabah.
Kencana HL had in March also won a RM216 million contract from Petrofac Ltd for the engineering, procurement and construction of two well head platforms for the Cendor oil field off the coast of Terengganu.
Kencana’s wholly-owned subsidiary, Kencana Energy Sdn Bhd, had on Jan 31 entered into contracts to jointly develop and operate an oil and gas field from the Berantai field offshore Terengganu.
SapuraCrest yesterday shed six sen to close at RM4.00 with 543,000 shares traded. The stock surged 8.18% to RM4.10 on Oct 27 from RM3.79 on Oct 25, its steepest one-day gain in six months.
This article appeared in The Edge Financial Daily, November 2, 2011.
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In an announcement to Bursa Malaysia yesterday, SapuraCrest said the contract is expected to generate revenue for the group by the fourth quarter of 2014.
It is also anticipated to “contribute positively” to the group’s earnings and net assets for the financial year ending Jan 31, 2015 and beyond, SapuraCrest said.
SapuraCrest said its wholly-owned subsidiary TL Offshore Sdn Bhd will construct two PLSVs outside Brazil and the other will be built in Brazil.
TL Offshore will be tasked with project management, procedures and operations of the PLSVs for Petrobas. The vessels will be deployed to perform oil and gas (O&G) marine construction projects in Brazilian waters.
SapuraCrest executive vice-chairman and president Datuk Seri Shahril Shamsuddin said in a statement the group’s entry into the Brazilian market is part of its long-term global expansion strategy.
“This contract is a significant milestone as it marks our entry into the vast, dynamic yet technologically challenging O&G market in Brazil. It is a definitive acknowledgement of SapuraCrest as a global player,” Shahril said.
Petrobras is a public-listed company in which the Brazilian government holds a majority stake.
The mega award comes in the midst of SapuraCrest’s merger with Kencana Petroleum Bhd via Integral Key Sdn Bhd, a special purpose vehicle established by Mayban Ventures Sdn Bhd.
Announced on July 11, the proposed merger values SapuraCrest at RM5.87 billion and Kencana at RM5.98 billion, with shareholders of the respective companies to get cash and Integral Key shares if they choose to accept the offer.
The merged entity will create the world’s fourth-largest integrated O&G services provider.
While the latest US$1.4 billion award provides a big boost to SapuraCrest’s future earnings, industry observers have raised questions if Mayban Ventures’ proposed merger of SapuraCrest and Kencana has undervalued SapuraCrest.
“Although the terms of the merger would more or less be fixed, it is debatable whether the deal gives enough weight to SapuraCrest’s tender book and future earnings potential,” said one industry observer.
Since the proposed merger was unveiled on July 11, SapuraCrest has secured several contracts with a combined value of RM5.16 billion.
To recap, SapuraCrest’s 50%-owned associate, Labuan Shipyard and Engineering Sdn Bhd, on Sept 30 was awarded a RM99.5 million shipbuilding contract from Tanjung Offshore Bhd.
On Sept 22, SapuraCrest’s unit TL Offshore was also awarded a US$227 million contract to construct two pipelay cum heavylift offshore construction vessels for Cosco Nantong Shipyard Co Ltd.
Kencana has yet to announce any new contract secured since July when the proposed merger with SapuraCrest was announced.
Earlier this year before the merger deal was struck, Kencana’s unit, Kencana HL Sdn Bhd, was given contracts worth over RM539 million.
These included a RM115 million contract from Petrofac E&C Sdn Bhd to construct a mobile offshore production unit and well head support structure for the Sepat early production system off the coast of Terengganu and a RM208 million job for the fabrication of a Kebabangan substructure for the Kebabangan northern hub development project off the coast of Sabah.
Kencana HL had in March also won a RM216 million contract from Petrofac Ltd for the engineering, procurement and construction of two well head platforms for the Cendor oil field off the coast of Terengganu.
Kencana’s wholly-owned subsidiary, Kencana Energy Sdn Bhd, had on Jan 31 entered into contracts to jointly develop and operate an oil and gas field from the Berantai field offshore Terengganu.
SapuraCrest yesterday shed six sen to close at RM4.00 with 543,000 shares traded. The stock surged 8.18% to RM4.10 on Oct 27 from RM3.79 on Oct 25, its steepest one-day gain in six months.
This article appeared in The Edge Financial Daily, November 2, 2011.
MF Global causes havoc< Prev Next >Zeti: Malaysia’s 3Q GDP shows improvements
