Med­serv awarded con­tract for lo­gis­tics sup­port to Eni North Africa

Malta Independent - - BUSINESS -

Malta Stock Ex­change-listed Med­serv has been re-awarded a con­tract by Eni North Africa (EniNa) to pro­vide lo­gis­tics base and as­so­ci­ated ser­vices for its ex­plo­ration ac­tiv­i­ties tak­ing place off­shore and on­shore Libya. The con­tract du­ra­tion is for a pe­riod of one year with the pos­si­bil­ity of ex­tend­ing for an­other year. This con­tract comes into ef­fect on the 1st of Jan­uary 2017. These ser­vices are to be car­ried out at the com­pany’s Malta base sit­u­ated in the Malta Freeport.

This con­tract, in ad­di­tion to the two-year ma­jor lo­gis­tic and base sup­port con­tract that came to mar­ket in 2016 for off­shore Libya ac­tiv­ity that was an­nounced ear­lier this year con­sol­i­dates the busi­ness pipe line for Med­serv Oper­a­tions and work lev­els for the Malta oper­a­tion are ex­pected to be high in the next three years.

Edi­son In­vest­ment Re­search, an in­de­pen­dent re­search body, also pub­lished their Q3 trad­ing up­date ear­lier this week. The re­port is­sued in­di­cates that, de­spite the very chal­leng­ing macro en­vi­ron­ment, Med­serv is main­tain­ing a ro­bust over­all per­for­mance aided by the ini­tial con­tri­bu­tion of METS. The re­port states that Edi­son’s num­bers are un­changed and they quote a fair value cal­cu­la­tion of €2.03 per share.

Med­serv pro­vided an up­date of the sta­tus of their in­ter­na­tional oper­a­tions in their in­terim Direc­tors’ re­port is­sued ear­lier this week. Med­serv has main­tained oper­a­tions in the Tripoli of­fice to sup­port the work be­ing done in Malta for Libya and has in place plans to re­turn to Libya as soon as the sit­u­a­tion in Libya al­lows it to do so. Mean­while, oper­a­tion in Cyprus re­mains un­changed. The base in Lar­naca is still in a moth­balled po­si­tion and dis­cus­sions are on­go­ing with both clients and lo­cal au­thor­i­ties on the fu­ture of shore base ser­vices. The oper­a­tion in Por­tu­gal is also in moth­ball mode and drilling oper­a­tions are now ex­pected to com­mence in the first quar­ter of 2017.

The com­pany also an­nounced that it is very ac­tive in de­vel­op­ment work in new mar­kets. A Trinidad of­fice has been set up to de­velop busi­ness in the Caribbean re­gion, where Med­serv is par­tic­i­pat­ing in a ten­der bid for busi­ness off­shore Trinidad. The out­come of this com­pet­i­tive bid should be known by the year end. The com­pany has also been ac­cepted on the ven­dor list of a fur­ther two com­pa­nies with oper­a­tions off­shore Trinidad which will al­low the com­pany to par­tic­i­pate in ten­ders ex­pected to be is­sued in 2017.

Med­serv Egypt is up and run­ning with the of­fice set up in Cairo and has been ac­cepted on the ven­dor list of two IOCs op­er­at­ing off­shore Egypt. The com­pany re­ported that the first ten­der which they may par­tic­i­pate in is ex­pected to be is­sued in Novem­ber 2016.

The com­pany also re­ported that the de­ci­sion to in­vest in the Oil Coun­try Tubu­lar Goods (OCTG) mar­ket of the Mid­dle East via the ac­qui­si­tion of METS has had a ma­jor im­pact on the group. Turnover and prof­itabil­ity in Oman are ex­pected to sur­pass fore­casts. The U.A.E. is ex­pected to reach the bud­get profit. The Iraq com­pany has just com­pleted the re­struc­tur­ing plan which al­lows METS Iraq to re­main fully func­tional and work at break-even as of Oc­to­ber 2016. Signs that the South­ern Iraqi oil and gas mar­ket is pick­ing up con­tinue to strengthen with IOCs show­ing re­newed in­ter­est. The syn­ergy that ex­ists in the prod­uct port­fo­lio of both com­pa­nies has started to de­liver new rev­enue. The first con­tract for pipe test­ing was suc­cess­fully com­pleted in the Med­serv Hal Far Malta fa­cil­ity us­ing tech­nol­ogy and know-how im­ported from METS.

De­spite the fact that the first three quar­ters of 2016 have proven to be chal­leng­ing to the oil and gas in­dus­try and Med­serv has had to re­spond and adapt to these mar­ket re­al­i­ties, the ini­tia­tives taken by the com­pany to date have not only re­duced the short­fall in per­for­mance but also placed the com­pany in a po­si­tion to per­form strongly next year.

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