UMW-OG EYES JOBS WORTH RM3.2B
Company bidding for 33 projects but plans to focus more on local market
UMW Oil & Gas Corp Bhd (UMW-OG) is bidding for 33 jobs worth RM3.2 billion this year, said its president Rohaizad Darus.
“We are currently tendering for 33 jack-up rig jobs — 20 international jobs and 13 local jobs. For this year, we plan to focus more on the local market,” he said after UMW-OG’s annual general meeting, here, yesterday.
“Some of our bids are short term and others are long term, so it is important for us to ensure that our bids continue to sustain us throughout the year.”
He said UMW-OG would have utilised its seven rigs under management soon, but subdued charter day rates remained a challenge.
“With the utilisation of UMW Naga 3 and UMW Naga 4, it would bring our utilisation rate to 100 per cent by July. At present, we have five of seven rigs working,” he added.
Rohaizad said this year looked to be a better year with the likelihood of continued production limit by Organisation of the Petroleum Exporting Countries as well as stable oil prices.
Oil prices rose yesterday on the announcement that Russia and Saudi Arabia were in favour of extending oil production cuts.
“This will give certainty to companies to invest again. We are already seeing this recovery with all our seven drilling rigs already under contract within six months of the production cut, compared to only two contracted late last year.
“While the recovery is expected to be slow with the day rate remaining depressed, we feel it is the best time to position ourselves to leverage on the recovery,” he said.
UMW-OG expects to be cash flow and earnings positive after the completion of its rights issue by the middle of October.
Rohaizad said the RM1.8 billion rights issue would able to reduce its gearing ratio from 1.81 to 0.56 time, a sizeable reduction.
“From the fund raised through the rights issue, we plan to use about RM1.5 billion to reduce debt and RM200 million for working capital. To date, we have about RM4.1 billion debt.”
He said the rights issue had been approved by parent Permodalan Nasional Bhd (PNB).
UMW-OG also announced the appointment of deputy chairman Datuk Abdul Rahman Ahmad as chairman with immediate effect.
Rahman, who is also PNB group president and chief executive officer, replaces Tan Sri Asmat Kamaludin who has retired.