SapuraCrest president says with the marriage, SapuraCrest Kencana will be among the world’s top five O&G service providers.
SapuraCrest Kencana Petroleum Bhd, the planned merged entity between Malaysia’s two largest oil and gas (O&G) players, is eyeing partnerships with other global O&G services providers.
SapuraCrest Kencana is set to become a global player once the merger of SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd is completed by the first quarter of 2012.
Senior executives of SapuraCrest and Kencana also assured that the new entity’s board will not be a “pushover” and there will be no staff lay-offs.
SapuraCrest executive vice-chairman and president Datuk Seri Shahril Shamsuddin said with the marriage, SapuraCrest Kencana will be among the world’s top five players.
Italy’s Saipem, France’s Technip and the US McDermott’s International Inc are among the world’s top O&G service providers.
Shahril said oil prices will continue to drive O&G activities worldwide, of which some will be needed to be carried out on a fast-track basis. Therefore, strategic alliances among the players will come in handy.
Shahril and Kencana chief executive officer Datuk Mokhzani Mahathir were speaking to Business Times at SapuraCrest’s headquarters recently.
Mokhzani said any O&G services firm must amass sufficient experience before it can start bidding for jobs.
“The merger puts us in a good position to win more jobs. With a combined balance sheet, the firms are in a better place to face the financial risks,” he said.
Shahril said that if the group wants to secure a RM3 billion to RM4 billion job, it must first show a RM2 billion to RM3 billion balance sheet.
“There is no way we can grab a RM3 billion-RM4 billion contract when we only have a balance sheet of between RM200 million and RM300 million. After this (the merger), we can go as far as the Gulf of Mexico,” he said, adding that the new board of directors will be filled with seasoned industry players.
Meanwhile, Mokhzani said the enlarged entity will also be able to to serve its more than 20 clients of mostly oil majors in a better manner as it will now have more than 500 vendors under its wings.
He added that the new entity will reward shareholders the way SapuraCrest and Kencana have been doing before, although no dividend policy has been planned yet.
He stressed that there will be no lay-offs for SapuraCrest and Kencana's more than 9,000 workers after the merger.
SapuraCrest and Kencana are merging in a RM11.85 billion deal to create Malaysia's largest integrated O&G service provider by assets.
Under their cash and share swap deal, special purpose vehicle Integral Key Sdn Bhd will buy all the assets and liabilities of SapuraCrest for RM5.87 billion and Kencana for RM5.98 billion.
The companies are obtaining shareholders' approval at their respective extraordinary general meetings tomorrow and December 15.
Shahril and Mokhzani will become group president/CEO and executive vice-chairman of SapuraCrest Kencana, respectively.
Datuk Hamzah Bakar, current SapuraCrest chairman, will be nominated group chairman.
SapuraCrest Kencana Petroleum Bhd, the planned merged entity between Malaysia’s two largest oil and gas (O&G) players, is eyeing partnerships with other global O&G services providers.
SapuraCrest Kencana is set to become a global player once the merger of SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd is completed by the first quarter of 2012.
Senior executives of SapuraCrest and Kencana also assured that the new entity’s board will not be a “pushover” and there will be no staff lay-offs.
SapuraCrest executive vice-chairman and president Datuk Seri Shahril Shamsuddin said with the marriage, SapuraCrest Kencana will be among the world’s top five players.
Italy’s Saipem, France’s Technip and the US McDermott’s International Inc are among the world’s top O&G service providers.
Shahril said oil prices will continue to drive O&G activities worldwide, of which some will be needed to be carried out on a fast-track basis. Therefore, strategic alliances among the players will come in handy.
Shahril and Kencana chief executive officer Datuk Mokhzani Mahathir were speaking to Business Times at SapuraCrest’s headquarters recently.
Mokhzani said any O&G services firm must amass sufficient experience before it can start bidding for jobs.
“The merger puts us in a good position to win more jobs. With a combined balance sheet, the firms are in a better place to face the financial risks,” he said.
Shahril said that if the group wants to secure a RM3 billion to RM4 billion job, it must first show a RM2 billion to RM3 billion balance sheet.
“There is no way we can grab a RM3 billion-RM4 billion contract when we only have a balance sheet of between RM200 million and RM300 million. After this (the merger), we can go as far as the Gulf of Mexico,” he said, adding that the new board of directors will be filled with seasoned industry players.
Meanwhile, Mokhzani said the enlarged entity will also be able to to serve its more than 20 clients of mostly oil majors in a better manner as it will now have more than 500 vendors under its wings.
He added that the new entity will reward shareholders the way SapuraCrest and Kencana have been doing before, although no dividend policy has been planned yet.
He stressed that there will be no lay-offs for SapuraCrest and Kencana's more than 9,000 workers after the merger.
SapuraCrest and Kencana are merging in a RM11.85 billion deal to create Malaysia's largest integrated O&G service provider by assets.
Under their cash and share swap deal, special purpose vehicle Integral Key Sdn Bhd will buy all the assets and liabilities of SapuraCrest for RM5.87 billion and Kencana for RM5.98 billion.
The companies are obtaining shareholders' approval at their respective extraordinary general meetings tomorrow and December 15.
Shahril and Mokhzani will become group president/CEO and executive vice-chairman of SapuraCrest Kencana, respectively.
Datuk Hamzah Bakar, current SapuraCrest chairman, will be nominated group chairman.
