Saturday January 12, 2013
SapuraKencana likely to win Samarang CPP contract
By NG BEI SHAN
beishan@thestar.com.my
PETALING JAYA: SapuraKencana Petroleum Bhd has started the ball rolling on the 10 central processing platform (CPP) contracts it is eyeing for this year.
This comes on the heels of reports that the oil and gas (O&G) heavyweight was “well-placed” to clinch the Samarang CPP project fromPetroliam Nasional Bhd (Petronas).
A prominent O&G publication has reported that SapuraKencana was well-positioned to secure the turnkey project, which would involve the construction and installation of a CPP. The CPP, with a 10,000 deck, is likely to come equipped with gas compression and water injection modules, with an expected completion date of 2015.
An analyst with UOB KayHian Research said: “This kind of unit ranges from RM1.2bil to RM2.7bil.”
He said the news did not come as a surprise, as analysts covering the country's largest oilfield services provider by market capitalisation had factored in RM3bil to RM5bil of contracts for the year.
“If it secures the project, slightly more than RM1bil might be added to its order book,” another analyst said, adding that he expected many more projects to flow in since it was only the beginning stages of the year.
In a recent note, AmResearch analyst Alex Goh said: “This new contract is part of the 10 CPP contracts that SapuraKencana is eyeing this year, as well as other multiple platform projects.
“The group's tenderbook of RM30bil currently includes bids of RM11bil that have been submitted, including the five new Petrobras pipelay or diving support vessels.”
Samarang is a mature oilfield off Sabah and the contract involves engineering, procurement, construction and commissioning for a CPP.
He said: “A hook-up and commissioning contract awarded to SapuraKencana is understood to be tied to modification work on the existing platforms.”
According to the report, the CPP is among the new facilities planned under the phased re-development of the mature oilfield. Petronas took over the shallow reef discovery in 1995 from Shell, 20 years after it was brought into production.
He also said the phased Samarang re-development was aimed at doubling the field output by lifting its oil recovery rate from 41% to 51% and expected the oilfield's production life to be extended by another 15 years.
Meanwhile, Goh was also positive on its US$2.9bil rig acquisition fromSeadrill, comprising 10 tender-assisted rigs (TAGs) plus a 49% stake each in five TAGs and five TAGs under construction.
With the deal, SapuraKencana would emerge as a leader in the global tender rig business, controlling more than 50% of the market.
AmResearch maintains a “buy” call on the counter with an unchanged fair value of RM3.70 per share. Data from Bloomberg showed that most analysts have given it a “buy” recommendation, with a consensus 12-month price target of RM3.42. The stock closed unchanged at RM3 with 9.7 million shares changing hands yesterday.
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