SapuraKencana: Bidding order book to hit RM12b by yr-end

See any Sabahan or Sarawakians in SapuraKencana shareholders?

SapuraKencana Petroleum Bhd, one of the world's largest full-fledged integrated oil and gas service providers, expects
to bid for RM12 billion worth of contracts by year-end, its President and Group Chief Executive Officer Datuk Seri Shahril Shamsuddin said today.

Currently, he said, the company was bidding for RM7 billion worth of jobs, of which 50 per cent are for local projects, while the remaining are in Australia and Brazil.

"Right now, we have about US$1.5 billion worth of businesses in Brazil, which is the base for us to enter West Africa. We are putting bids for the second round in Brazil," he told reporters after the launch of the company's prospectus and new corporate logo here.

Shahril said the bidding success rate was about 30 to 40 per cent. To maintain its operational sustainability, he said, the group needs to maintain an order book of about RM8 billion to RM12 billion a year.

Presently, the company's order book stands at about RM13.5 billion, which translated into backlog jobs that can make them busy for three-and-a-half years.

The merger entity is currently the world's fifth largest integrated oil and gas engineering, procurement, construction, installation and commissioning (EPCIC) services provider.

"There have been businesses already while we are merging, so I guess that's an illustration of how this merger has fit like a jigsaw puzzle and integration is not an issue because our people have been working together as EPCIC team," Shahril said.

Asked whether the merger and acquisition exercise will entail retrenchment, Shahril said that on contrary the company, which currently has 9,000 workforce under its wings, was still looking for more people to support the group in future.

He also said the company would continue to support and be a catalyst for local vendors development in the oil and gas industry in line with the country's aspirations.

"To date, we have dished out about RM1.5 billion to RM2 billion worth of works to small-and middle-sized companies. We are like mothership, supporting about 500 vendors and suppliers," he said.

On capital expenditure, Shahril said the group was spending US$1.5 billion over the next three years to finance the projects including drilling rigs and pipe-laying vessels.

Asked whether rising global oil prices would affect the group,
SapuraKencana's Executive Vice-Chairman Datuk Mokhzani Tun Dr Mahathir said the group started as two small companies and has faced many challenges to reach this stage.

"We know how to operate even on tighter margin, so I'm very confident that despite whatever happens in the market, we will be resilient and strong enough to pull through," he said.

The listing of the company on Bursa Malaysia's Main Market tomorrow will see the floatation of 5,004,366,196 shares at RM2 per share issue price.

As a result of the listing, the market capitalisation of Sapurakencana will be valued at slightly over RM10 billion. Also present at the event was Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop. -- Bernama

Kencana awarded RM 460 million contract offshore Sarawak.

Kencana Petroleum secures RM460m contract

KUALA LUMPUR: Kencana Petroleum Bhd has received a letter of award from Murphy Sarawak Oil Co., Ltd. for the fabrication of offshore topsides and the contract is valued between RM460mil and RM474mil.

It said on Tuesday Murphy Sarawak awarded the contract on April 20 for the provision of engineering, procurement, construction and commissioning (EPCC) of Serendah Production topsides facilities at the oil fields development off Bintulu, Sarawak.

"The value of the contract is estimated at between RM460mil and RM474mil. The contract is expected to be delivered from first quarter of calendar year 2013 to second quarter of calendar year 2013," it said.

Kencana expected the contract to contribute positively to the earnings and net assets per share of the group for the duration of the contract.

Yu family-owned gets RM 1.7 billion contracts in Sarawak

Hock Seng Lee secures RM45.7m Sibu flood mitigation job

KUALA LUMPUR: Hock Seng Lee Bhd (HSL) has secured a RM45.7mil sub-contract for further flood mitigation works in Sibu.

The Sarawak-based company said on Wednesday this was the latest project after it secured a construction contract for a RM10.6mil orphanage complex and a RM16.9mil government office, both in Bintulu.

"Together with the RM82mil 20.2-km road project at Balingian to Jalan Persekutan announced in February 2012, newly secured jobs for 2012 are worth RM155mil," it said.

HSL said that it had procured about RM313mil new projects for 2011, so it is in line to surpass this for 2012.

"The new contracts bring the total value of projects in hand for HSL to RM1.7bil of which some RM1.0bil is outstanding," it said.

Multi millions profitable Sibu Shipyards steal electricity

Three shipyards in Sibu found stealing electricity

Borneo Post  May 8, 2012, Tuesday

TELL-TALE SIGN: The meter compartment’s security seal.

KUCHING: Three shipyards in Sibu were caught tampering with their electricity meters by Sarawak Electricity Supply Corporation (Sesco) last month.

“All the three shipyards which were found to have tampered their meters are located at Jalan Rantau Panjang in Sibu,” said Sesco in a statement issued here yesterday.

It added that the meters installed by Sesco at these shipyards were equipped with tamper-detection features. It has the capability to detect and record any meter irregularities.

The statement said that Sesco would continue to purchase more advanced meters in their fight against electricity theft through meter tampering.

According to Sesco, in order to meddle with the meter wiring to steal electricity, the thieves have to cut off the security seals of the meter or seals at the cable compartment of the main switch board.

Any signs of security seals being cut, damaged or modified can be easily identified by Sesco’s meter inspection team.

In one of the meter-tampering cases discovered, the meter was found to have no security seals.

And in a case in Miri, a hardware factory was caught for forcing open one phase of the measurement circuit to prevent electricity consumption being registered by the meter. The security seals of the meter were also found to be cut.

Power theft losses in Sibu are still the highest in the state although the percentage of losses has shown great improvement since 2011.

THE TACTIC: The opened phase of the measurement circuit.

“In monetary terms, we lost about RM50 million through power theft annually in Sibu. This is about 50 per cent of the total amount recorded in the state.”

Miri is second on the list with RM24 million.

Sesco said it would continue to mount public awareness campaigns to educate the public that stealing electricity is an offence and that it could cause property loss and electrocution.

Theft of electricity is an offence under Section 33(5) of the Electricity Ordinance and is punishable with a fine of up to RM100,000 or imprisonment of five years or both.

Members of the public can alert Sesco about electricity theft by calling 082-443535 or write to: The Controller, Revenue Management Control Centre, Wisma Sesco, Jalan Bako, Petrajaya, 93673 Kuching, Sarawak.

Naim to get more land in Miri for Hospital business

KPJ, Naim Land ink hospital pact

Published: 2012/04/19

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Kumpulan Perubatan (Johor) Sdn Bhd has signed a joint-venture agreement with Naim Land Sdn Bhd to own a purpose-built
hospital and later operate the hospital at Kuala Baram district in Miri.

Under the joint venture, Kumpulan Perubatan Johor, a wholly-owned subsidiary of KPJ Healthcare Bhd, will design, develop, build, complete and run the hospital.

Parent company, KPJ Healthcare, said Kumpulan Perubatan Johor, would operate through a joint-venture company, in which the latter would hold 70 per cent equity interest while Naim Land the remaining 30 per cent.

The joint venture was in line with the KPJ Healthcare and its subsidiaries' objectives to increase their hospital network to locations where private healthcare was in demand.

At the same time, it would leverage on KPJ's and Naim Land's capabilities to operate a private hospital and to lower KPJ's initial start-up costs, it said.

The joint-venture is expected to be fulfilled and completed by the first half of this year, said KPJ Healthcare in a statement today. -- Bernama

Rajang River Shipping Magnate Lau Nai Hoh switches production to China

TAS turns to China shipyardS

By JACK WONG
jackwong@thestar.com.my

KUCHING: TAS Offshore Bhd has turned to established shipyards in China to build new vessels as its shipyard in Sibu could not cope with the many orders coming in.

Group managing director Datuk Lau Nai Hoh said the Sibu shipyard was now operating at full capacity, with more than 10 vessels of different types under construction.

He said one anchor-handling tug supply (AHTS) vessel was now being built in a shipyard in China, adding that the company was in the process of contracting out the construction of two more similar vessels to builders in that country.

“The three vessels would cost about US$38mil. One of the vessels is for a regular client from the Middle East for use in deepsea operation while the other two will be for sale,” he told StarBizWeek.

Each vessel will take between 18 and 20 months to build.

Lau said TAS would continue to outsource the construction of bigger vessels to shipyards in China as that country could build vessels at competitive rates, had proven quality workmanship and could deliver the vessels on time.

He said the cost of the AHTS vessel now under construction in China shipyard was about 3% lower than if built locally.

Lau said TAS had secured orders for five tugboats worth RM22.7mil last month and another one worth RM2.5mil this month from clients in Indonesia.

Demand for tugboats in Indonesia is spurred by the growth of mining activities.

Lau said the company had secured contracts worth a total of RM84.5mil for financial year ending May 31, 2012.

Its clients are mainly from the Middle East, Indonesia and Singapore.

He said the company was finalising a deal with a regular Middle East client to build two AHTS vessels for about US$32.5mil.

If the deal is sealed, one of the vessels will be constructed locally and the other in China.

“We are also negotiating with a local client to build another harbour tug. The client's previous order of a harbour tug will be delivered in the next few weeks,” he added.

Lau said due to inavailability of space, the company's Sibu shipyard could not be expanded to enable more vessels to be built at any one time.

The company may build another shipyard in other designated shipbuilding zones in Sarawak.

He said the Sibu shipyard had been upgraded and was expected to take delivery of one gantry crane soon to speed up work processes.

Indonesia wants Singapore Government double standards to stop

Indonesia’s central bank said it wants equal treatment for Indonesian banks to operate in Singapore as a condition for the approval of DBS Bank’s bid for Bank Danamon Indonesia.

Bank Indonesia deputy governor Halim Alamsyah said in Jakarta on Wednesday that it will seek talks on reciprocity with Singapore.

The Monetary Authority of Singapore (MAS) declined to confirm if these talks have started, stating on Wednesday: ‘Our dealings with other regulators are confidential.’
Background story

DBS chief executive Piyush Gupta said he remains “fairly confident” about getting the nod from Indonesian regulators in the next six months.

He added that rejecting the DBS deal could be a big blow to investor sentiment in Indonesia.

DBS said in a statement on Wednesday that it will work closely with Indonesian regulators to ensure the process runs smoothly and meets all regulatory requirements.

“Given the way the Indonesian laws are structured, the bank is fairly confident and hopeful that it will receive approval within the second half of the year,” the statement said.

However, the bank is also “mindful of possible headwinds including the issue of reciprocity.”

The MAS noted on Wednesday that there are four Indonesian banks with a presence in Singapore.

Of these four, only Bank Negara Indonesia has a full banking licence. This allows it to offer a wide range of services for retail and corporate clients.

But foreign banks with full banking licences are restricted in how extensive their branch and ATM networks can be.

Of the three other banks, Bank Mandiri operates as an offshore bank while Bank Central Asia and Panin Bank both have only one representative office here.

The MAS spokesman added that ‘all foreign banks are free to expand their activities in Singapore subject to the guidelines specific to the licence under which they operate’.

On April 2, DBS offered to buy Jakarta-based Bank Danamon for up to $9.1 billion, in the biggest takeover by a lender in South-east Asia. DBS will buy a 67 per cent stake in Danamon from a unit owned by its own substantial shareholder, Temasek Holdings.

It will pay $6.2 billion in shares for this stake and make a general cash offer for the rest of the Danamon shares, paying 7,000 rupiah a share, or $2.9 billion. The deal values Danamon at $9.1 billion in total.

Under Indonesian law, DBS will have to sell shares of Bank Danamon Indonesia back to the public if it owns more than 80 per cent of the lender after a takeover.

DBS Bank filed a notice with the Singapore Exchange last week stating that it will have to ensure it holds no more than 80 per cent of Danamon shares within two years of the acquisition unless it gets a waiver or extension from the Indonesian authorities.

Danamon has a network of 3,000 branches and a customer base of six million, and is Indonesia’s sixth-largest bank by assets. This will allow DBS to tap Indonesia’s fast-growing economy.

The Indonesian economy grew 6.46 per cent last year, and is forecasted to grow 6.5 per cent this year.

DBS shares lost seven cents to close at $13.19 on Wednesday.

Danamon shares remained unchanged at 6,300 rupiah.


Jakartaglobe.

Concerns over call for reciprocity thestart.com.my

PETALING JAYA: Bank Indonesia's statement on reciprocity has brought back concerns that had earlier also been an issue of contention among Indonesian banks with regards to their ability to operate and grow in Malaysia.

The Indonesia central bank reportedly said on Tuesday that it wanted “equal treatment” for Indonesia banks to operate in Singapore and would discuss with the city-state on reciprocity as a criterion for its approval on Singapore's DBS group to buy the country's sixth-largest bank, PT Bank Danamon Indonesia.

At the moment, there are certain restrictions on foreign banks operating in Singapore such as a limit on the number of automated teller machines and locations the banks are allowed to operate there, according to analysts covering the sector in the city-state.

The Indonesian banking scene is more liberalised with less limitations in comparison after it opened up its banking sector post Asian financial crisis as a way to encourage foreign investments and mend its then broken economy.

Requirement: Bank Indonesia says it wants ‘equal treatment’ as a criterion for its approval on DBS’ bid to buy Bank Danamon. – Reuters

Cheah King Yoong, a banking analyst at Alliance Research, said the Indonesian market was one of the “must-have markets” for local banks which wanted to continue to grow given the level of maturity present in the industry here.

Petronas bekukan syarikat-syarikat Sarawak dan Sabah dari kontrak?

License freeze, Sabah O&G contractors in the cold

freemalaysiatoday.com| November 4, 2011

It's ironic that Petronas' RM45 billion O&G project in Sabah may not have local contractors' participation.

KOTA KINABALU: National oil company, Petronas’ decision to put a freeze on upstream oil and gas industry license renewals and registrations will basically block Sabah O&G contractors from competing for its RM45 billion mega project contracts.
Integral to Petronas’ RM45 billion plan is the Sabah-Sarawak Integrated Oil and Gas Project which encompasses upstream development of offshore O& G fields and downstream development of Sabah Oil and Gas Terminal and the Sabah-Sarawak Gas Pipeline.
Petronas’s announcement was received with mixed feelings in Sabah and excitement simmered among local contractors who saw it as a sound business opportunity.
But any prevailing enthusiasm over the RM45 billion project hit a wall recently when Petronas informed contractors that there was a freeze of license renewals.
According to Malay Chambers of Commerce Sabah president Awang Buhtaman Awang Mahmun, Petronas had last month sent out letters to contractors saying they were suspending the renewals of licenses and registration of applications.
He said the reason given in the letter was that Petronas was upgrading its database.
A disappointed Awang Buhtaman said there had been a lot of interest among local contractors ever since Petronas announced the mega project.
“We have seen a lot of interest and our contractors are willing to bid for contracts and be part of the project.
“But now with the suspension on license renewals, it makes it impossible for us to participate in the project.
“An active license is important if you want to participate … we are expecting a lot of invitations to bid in January but with the renewal of licenses suspended, it will not be possible for us to take part,” he said.
Petronas too stringent
Petronas is replacing its existing eLARIS.net system with a new license and registration application system. The new system will take effect in January.
In preparation for the smooth implementation of the new system, Petronas had frozen all applications for new licenses and registrations beginning Oct 1 until the end of the year.
Awang Buhtaman said that although they received Petronas’ letter there has been no briefing yet on the new system
He also raised contractors’ concerns over the lack of vendor development programme (VDP) in Sabah.
He said Petronas, strangely enough, did not have a physical registration and renewal counter Sabah and contractors wishing to register or renew had to fly to Kuala Lumpur to do it.
“Petronas is very stringent. If a document is missing we are required to reproduce the whole set instead of just the document.
“Currently we have to do the documentation manually and fly to Kuala Lumpur to renew our licenses. The process takes a long time and is a lot of hassle,” he said.
While he urged Petronas to lift the freeze on renewals, he also added that it was time Petronas introduced an instrument to enhance the participation and capacity of local Sabahans to start off with the VDP in Sabah.

Gas discovery to boost Sarawak’s O&G scene

by Ronnie Teo, ronnieteo@theborneopost.com. Posted on February 15, 2012, Wednesday

NATURAL RESERVES: Image of one of Petronas’ platforms off the coast of Malaysia. The new discoveries amount to an estimated recoverable reserve of almost four trillion cubic feet, almost four per cent of Malaysia’s current natural gas reserves of 14.8 million barrels of oil equivalent. – AFP photo

KUCHING: Petroliam Nasional Bhd’s (Petronas) two new gas discoveries offshore Sarawak will continue to fuel the excitement for oil and gas investments in and around the state.
According to an analyst from AmResearch Sdn Bhd (AmResearch), while these new gas finds would need another three to five years of analysis and interpretation of seismic data before progressing to the initial development phase, this would certainly provide excitement to the industry here.
“Sarawak is a major state gas producer and exporter, with the country’s only liquefied natural gas plant located in Bintulu,” the analyst highlighted.
“Over the next twelve months, we expect Shell’s massive oil recovery projects in the Baram Delta off Sarawak to gain prominence. This involves the Bokor, Bakau, Baram, Baronia, Betty, Fairley Baram, Siwa, Tukau and West Lutong oilfields.”
To recap, Petronas on Monday announced two gas discoveries in the Kasawari and NC8SW fields in Block SK316 offshore Sarawak using exploration wells Kasawari-1 and NC8SW-1.
These were the latest wells drilled in Block SK316 which was part of Patronas’ strategy to intensify domestic exploration and prolong its reserves.
These discoveries amounted to an estimated recoverable reserve of almost four trillion cubic feet, almost four per cent of Malaysia’s current natural gas reserves of 14.8 million barrels of oil equivalent.
Oil and gas analyst from OSK Research Sdn Bhd Jason Yap believed this was good overall for the oil and gas industry in Malaysia.
“Generally, this will leave a positive impact for the industry, especially for local service providers,” he outlined in a telephone interview.
“They currently have a utilisation rate between 50 to 60 per cent. With this move, it could be boosted to more than 70 per cent.
“So for calendar year 2013, this will definitely be the year for oil and gas,” he enthused.
In the nearer horizon, AmResearch’s oil and gas analyst anticipated more fresh news from Petronas, particularly on its RM15 billion fast-tracked programme to develop gas reserves from a cluster of fields in the North Malay basin off Peninsular Malaysia.
“This project is expected to commence production towards the end of 2013,” he highlighted.
“Initial beneficiaries for the North Malays basin development will be fabricators such as MMHE, Kencana Petroleum Bhd, SapuraCrest Petroleum Bhd and Dialog Group Bhd,” he added.
“Also, UMW Oil & Gas Corporation Sdn Bhd, which provides oil country tubular goods and pipelines and rig services, as well as Wah Seong Corp Bhd which provides gas compression modules and pipe-coating services, could likewise benefit from this.”

Petronas and Total study potential of K5

Borneo Post March 29, 2012, Thursday

KUCHING: Petronas signed a Heads of Agreement (HOA) with Total of France to jointly study the development and production potential of K5, a high carbon dioxide gas field offshore Sarawak. Discovered in 1970, the gas field K5 has 70 per cent carbon dioxide content and it is located approximately 230 kilometres from Bintulu in water depth of 80 metres.
Petronas said in a press statement yesterday that K5 would be the first gas field with more than 50 per cent carbon dioxide content to be developed in Malaysia.
Under the HOA, Petronas’ newly established upstream research unit Exploration and Production Technology Centre and Total would explore the possibility of developing the field in ways that were technically, commercially and environmentally viable. The HOA was signed at the Kuala Lumpure Convention Centre where Petronas was represented by Petroleum Management vice president Ramlan Abdul Malek and Total was represented by Total E&P Malaysia general manager Vincent Dutel.
The scope of the study would also include the development of carbon dioxide management technologies in the area of carbon capture, transportation and sequestration.
The study was set to commence immediately and would take 15 months to complete.

Sarawak’s total trade volume grows to RM92 bln in 2012

Borneo Post March 3, 2012, Saturday

SIBU: Malaysia’s total trade posted RM1.27 trillion last year, representing an increase of 8.7 per cent over the previous year, said Deputy Minister of International Trade and Industry Datuk Jacob Dungau Sagan.
“This is the highest trade figure we have ever achieved, and it is also our 14th consecutive year of trade surpluses,” Sagan said when officiating at the Malaysia External Trade Development Corporation’s (Matrade) programme with entrepreneurs and exporters at a leading hotel here yesterday.
He added, “The trade with Myanmar rose 115 per cent, Indonesia (23 per cent) and Cambodia (20 per cent) giving an indication perhaps, of where business potential might lie.”
“We also saw increase in our trade with Australia, Japan, the Peoples Republic of China and the Republic of Korea. The Peoples’ Republic of China is currently our largest market, making up a total of RM91 billion or 13 per cent of our exports.
“Singapore comes in second with RM88 billion and Japan is in third place with RM80 billion,” Sagan said in his text of speech read out by deputy chief executive officer (CEO) of Matrade Datuk Zakaria Kamarudin yesterday.
He, however, noted exports to America declined by 2.8 per cent, reflecting the sluggish state of its economy.
Trade with Asean neighbours represented 24 per cent of the country’s export, he noted, adding that declines were registered with Singapore, Thailand, Vietnam, the Philippines and Laos.
On the local front, the deputy minister observed Sarawak’s own trade volume grew by 24 per cent last year to post RM92 billion, representing some seven per cent of Malaysia’s total trade globally.
He disclosed, “Exports totalled RM80 billion and imports RM12 billion. Sarawak’s major exports were mineral liquefied natural gas (LNG) (51.3 per cent), crude petroleum (22.6 per cent), and palm oil (8.5 per cent).
“And its major markets were Japan, Taiwan, Korea and China. Investments in approved projects in the state last year were valued at RM8,453 million. Sarawak ranked third, after Penang and Selangor, in this category.”
According to Sagan, it was envisaged that these 43 manufacturing projects (29 new and 14 expansion projects), would create about 4,900 jobs in Samalaju, Tanjong Manis, Sejingkat, Pending, Muara Tabuan, Sibu, Kuching, Kemena and Bintulu.
He pointed out that most of the approved manufacturing projects were basic metal products, chemicals and chemical products, fabricated metal products, transport equipment and wood and wood products.
On a related matter, to increase exports, Malaysian companies, he stressed, needed to be more aggressive in export promotion.
To this, he assured, “Matrade will continue to assist you through its network of 43 offices around the world as well as through its various promotional programmes.”
Among the programmes, Inward Buying Mission (IBM) allocation helped companies, especially SMEs, to reduce the cost of travelling overseas to meet buyers.
As such, those yet to register with them were urged to do so, enabling them (registered companies) to have direct access to the latest market information, trade leads, and trade programmes and activities where they would be kept posted.
“This year, Matrade will be undertaking 121 trade promotion activities. These include participation in International Trade Fairs, specialized marketing missions, trade and investment missions as well as incoming buying missions.”
As such, he urged the private sector, especially the SMEs to participate actively.