Stock Name: SAPCRES
Company Name: SAPURACREST PETROLEUM BHD
Research House: AMMB
Oil & Gas sector
Maintain overweight: We recently visited five oil and gas (O&G) companies in Singapore with some fund managers. We met with fabricators, offshore installation providers and vessel operators ' Keppel Corp, Sembcorp Marine, Otto Marine, Ezra Holdings and Cosco Corp (S) Ltd.
We came away with the impression that the management of these companies are generally cautiously optimistic near term while remaining highly positive on the rollout of O&G projects in the long term.
Keppel Corp and SembCorp Marine's managements indicated that the deepwater ban in the US Gulf of Mexico (GOM) could mean higher value jobs in the longer term given a more stringent safety regime.
Petrobras is expected to call for tenders for 28 deepwater rigs, potentially worth US$20 billion (RM63.8 billion), over the next three weeks. We understand that there could be up to three successful bidders as the contracts could be awarded in four separate packages of seven drillships. Keppel Corp and Sembcorp Marine are among nine contenders.
This positive feedback reaffirms our overweight call on the sector given: (i) RM4 billion fabrication contracts for Malaysian shallow fields to be awarded in 2H2010; (ii) a RM3 billion Petronas liquefied natural gas re-gasification plant in Melaka; (iii) new maintenance and hook-up commissioning services for offshore platforms, potentially worth RM3.2 billion; (iv) Exxon-Mobil's enhanced oil recovery investments worth over RM7 billion; (v) revival of the RM2 billion Sabah Oil & Gas Terminal project in Kimanis; and (vi) proposed listing of MISC's Malaysia Marine Heavy Engineering and Petronas' petrochemical division by end-2010.
We maintain our buy calls on SapuraCrest, Alam Maritim, Kencana, Wah Seong, Tanjung Offshore, Dialog Group and Petronas Gas. Our top pick continues to be SapuraCrest given its huge lock-in order book of almost RM10 billion. We maintain our sell call on KNM Group given its poor earnings delivery. ' AmResearch, July 28
This article appeared in The Edge Financial Daily, July 29, 2010.
Company Name: SAPURACREST PETROLEUM BHD
Research House: AMMB
Oil & Gas sector
Maintain overweight: We recently visited five oil and gas (O&G) companies in Singapore with some fund managers. We met with fabricators, offshore installation providers and vessel operators ' Keppel Corp, Sembcorp Marine, Otto Marine, Ezra Holdings and Cosco Corp (S) Ltd.
We came away with the impression that the management of these companies are generally cautiously optimistic near term while remaining highly positive on the rollout of O&G projects in the long term.
Keppel Corp and SembCorp Marine's managements indicated that the deepwater ban in the US Gulf of Mexico (GOM) could mean higher value jobs in the longer term given a more stringent safety regime.
Petrobras is expected to call for tenders for 28 deepwater rigs, potentially worth US$20 billion (RM63.8 billion), over the next three weeks. We understand that there could be up to three successful bidders as the contracts could be awarded in four separate packages of seven drillships. Keppel Corp and Sembcorp Marine are among nine contenders.
This positive feedback reaffirms our overweight call on the sector given: (i) RM4 billion fabrication contracts for Malaysian shallow fields to be awarded in 2H2010; (ii) a RM3 billion Petronas liquefied natural gas re-gasification plant in Melaka; (iii) new maintenance and hook-up commissioning services for offshore platforms, potentially worth RM3.2 billion; (iv) Exxon-Mobil's enhanced oil recovery investments worth over RM7 billion; (v) revival of the RM2 billion Sabah Oil & Gas Terminal project in Kimanis; and (vi) proposed listing of MISC's Malaysia Marine Heavy Engineering and Petronas' petrochemical division by end-2010.
We maintain our buy calls on SapuraCrest, Alam Maritim, Kencana, Wah Seong, Tanjung Offshore, Dialog Group and Petronas Gas. Our top pick continues to be SapuraCrest given its huge lock-in order book of almost RM10 billion. We maintain our sell call on KNM Group given its poor earnings delivery. ' AmResearch, July 28
This article appeared in The Edge Financial Daily, July 29, 2010.
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