UMW OG eyes new markets to enhance growth
KUCHING: UMW Oil & Gas Corporation Bhd (UMW OG) is eyeing new markets beyond the Southeast Asian region to further enhance its growth.
The research division of CIMB Investment Bank Bhd ( CIMB Research) in a report said the oil and gas company could potentially venture to the Middle East in the future.
Upon the company’s latest briefing at Invest Malaysia 2014 recently, CIMB Research said UMW OG plans to expand its presence out of Asean in 2015 with the Middle East being a potential key market.
UMW OG’s fleet composition of rigs working in Malaysia and overseas is expected to shift from 75:25 per cent in financial year 2013 (FY13) to 40:60 per cent in FY15 onwards as the company ventures beyond Souteast Asia.
Additionally, CIMB Research observed that the oil and gas player has been actively bidding for new jobs and is negotiating for 25 contracts worth US$2.2 billion (RM7 billion).
Out of the 25 contracts that UMW OG is bidding, 12 are domestic and the remaining 13 contracts are spreaded across various markets in Asean.
The research firm noted that whilst Malaysia remains one of its key markets, UMW OG has identified Vietnam and Myanmar as the regional new markets.
CIMB Research analyst Norziana Mohd Inon said, “We are excited by the robust jack- up tendering market in Southeast Asia.
“Given the shortage of jack-up rigs in the (Asean) region, UMW OG is in the position to choose its contracts.”
As at May 27, the analyst observed that there were 15 jack-up rigs working in Malaysia and only one, which is UMW OG’s Naga 4 is locally owned.
“A total of 61 jack- up rigs worked in Southeast Asia of which UMW OG had seven per cent (market share) through the deployment of Naga 2 (Vietnam), Naga 3 (Vietnam), Naga 4 (Malaysia) and Naga 5 (the Philippines),” she added.
Norziana noted the construction of UMW OG’s Naga 6 and Naga 7 jack-up rigs are on schedule.
She explained that Naga 6 which is expected for delivery in September is presently 90 per cent completed while Naga 7 which is slated for delivery in December is 75 per cent completed.
She believed the completion for both Naga 6 and Naga 7 jack-up rigs will be on schedule citing there could be upward surprises in the form of early deliveries of the jack-up rigs.
She also noted UMW OG’s Naga 5 which is working on a six-week US$7 million (RM22.4 million) job in the Philippines was delivered on April 29, 32 days ahead of schedule.
Norziana observed that Naga 5 is expected to complete the project in the Philippines by month end.