Oil and Gas 3Q212 Outlook
Still rosy outlook despite easing crude prices
• Weremain bullish on the overall oil & gas (O&G) sector, based on the high likelihood of more contract awards to be announced.
• Exploration and production activities are expected to remain active.
• New contract replenishment rate appears to be sustainable – Petronas & Hess Exploration are expected to spend some RM16.4bn on a new integrated gas development (North Malay Basin) with tender awards to be known by end-2012.
• The first Chemical Enhanced Oil Recovery (CEOR), Shell’s St Joseph field, worth USD12b is a catalyst for local O&G companies.
• Petronas is expected to announce the 3rd Risk Service Contract in the near term.
• Malacca’s regasification plant is expected to commence in August and focus now is on the terminal fee structure.
• Downstream activities remain robust as Petronas Dagangan would be allocating about RM200mn in capex to nurture its recent downstream acquisition (it will be buying RM197.3mn worth of downstream companies from Petronas located in Philippines, Vietnam, Thailand and Malaysia)
• Berantai Risk Service Contract project involving the SapuraKencana and Petrofac consortium is progressing well where the modification and upgrade works to the FPSO Berantai is expected to be completed in 2Q12 and first gas from the field is expected to be achieved in 3Q12.