Com­pany bid­ding for 33 projects but plans to fo­cus more on lo­cal mar­ket

New Straits Times - - Business - ZARINA ZAKARIAH KUALA LUMPUR zari­naz@me­di­

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.

Datuk Ab­dul Rahman Ah­mad

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