KUCHING: The oil and gas industry is expected to stage a come back to the black as a decent trickle of jobs seen since July indicated the beginning of positive uptakes for oil and gas moguls.

INCREASING JOB FLOW: The research house’s recent analysis on the key areas of development offshore reveals that the sector expects to see contracts worth between RM10 billion and RM15 billion in the coming 18 months.

“We see the industry on the brink of a revival,” suggested an analyst from ECM Libra Capital Sdn Bhd (ECM Libra) yesterday.

“Already, a trickle of jobs has been seen since July and we expect the next major capital expenditure (capex) cycle to hit soon.”

In addition, the research house’s recent analysis on the key areas of development offshore revealed that the sector would see contracts worth between RM10 billion and RM15 billion in the coming 18 months.

“Our study deduced that between RM10 billion and RM15 billion in jobs could be seen by the industry, starting off with awards like the Sabah Oil & Gas Terminal, followed by fabrication jobs for the redevelopment of the Tapis pooling platform and also the floating re-gasification vessel accompanying a gas terminal on the west coast,” highlighted the analyst.

“After these jobs, we then believe that tenders for developing the Malikai and Kebabangan deepwater fields would follow suit.”

In tandem with this, ECM Libra noted that Seong Corporation Bhd (Wah Seong) would benefit from more upcoming pipeline jobs while Dayang Enterprise Holdings Bhd (Dayang) would see more hook up and commissioning works.

“Besides this, we see the need for heavy equipment from companies such as Offshore Bhd and Dayang as well. Demand for offshore support vessels should continue to flow in throughout and after major fabrication jobs,” the analyst observed.

On the corporate side, Samsung Heavy Industries Co Ltd was looking to set up shop in Teluk Ramunia to participate in the oil and gas sector in Malaysia.

This, added the research analyst, would put the company on par with Engineering Sdn Bhd’s (Sime Engineering) newly acquired yard space. ECM Libra speculated that some alliances could be formed given the dire state of Sime Darby Bhd’s oil and gas division.

Other news in the region included Maritim Resources Bhd (Alam Maritim) entering into a joint venture with Pacific Crest Pte Ltd to own an accommodation work barge for US$29 million while Holdings Bhd bagged a RM220 million loan to fund two vessels for Jasa Merin (M) Sdn Bhd.

Looking at the performance of crude oil prices, ECM Libra believed that the weak demand numbers in the US would not prolong the rise seen by O&G players to date, although prices have been predominantly let up by a decline in the US dollar.

“Crude oil futures crept up 2.2 per cent week-on-week, closing above the US$80 per barrel level despite seeing some weakness towards the end of the week,” noted ECM Libra’s analyst. “expect range bound trading to prolong.”

The research firm expected crude oil prices to remain range bound between the US$70 to US$80 levels at best.