SAPURA ENERGY SEES PROFIT IN 2020
Company finalising contracts in Middle East, India, Americas and Africa in next few weeks
SAPURA Energy Bhd is upbeat about returning to the black in the financial year ending January 31 2020, fuelled by increasing order book, reduction in annual interest debt and higher oil and gas (O&G) production.
Its president and group chief executive officer Tan Sri Shahril Shamsuddin said the company was finalising more contracts in the Middle East, India, South and Central America as well as Africa in the next few weeks.
Sapura Energy’s order book stands at RM16 billion, which will give the company earnings visibility for the next three years.
“We are in a period of growth with right strategies to build our order book. We also need working capital to execute huge order book,” Shahril said at the signing ceremony between Sapura Energy and OMV Aktiengesellschaft (OMV AG), here, yesterday.
Shahril said it was vital for an O&G company to have a proven track record in terms of experience and expertise, while generating earnings and enhancing its capability to mitigate industry risks.
Sapura Energy is expected to close a joint-venture (JV) deal with OMV AG, an Austrian integrated O&G company, by January 31 next year for a 50 per cent stake in Sapura Upstream Sdn Bhd for US$975 million (RM4.07 billion).
The initial proceeds include US$540 million for a 50 per cent shares subscription in Sapura Upstream by OMV AG and US$350 million for the inter-company debt repayment.
Additionally, the parties agreed to receive up to US$85 million based on occurrences linked to an exploration asset in Mexico.
Of the total proceeds, Shahril said RM720 million would be used for Sapura Energy’s debt repayment and RM160 million for its future working capital.