Oil and gas industry likely to consolidate amid low oil prices, says Deloitte

February 2, 2016

Dateline 2015-12-21, The Malay Mail:

The oil and gas industry is expected to consolidate amid the pervasive low oil prices which have led to reduced investments and slower production rates, said Deloitte Malaysia.

“The effect has been highlighted by mature oil fields, marginal oil fields and high cost of exploration that runs long term for potential deep water assets, which have a high break-even point.

“Falling oil prices are forcing oil and gas companies to seriously review the economics or defer these capital-intensive projects,” its Energy & Resources Leader Nizar Najib said in a statement.

Nizar said although new refining projects in Sabah and Johor will significantly increase Malaysia’s refining capabilities as part of the government’s agenda to become a regional oil and gas hub by 2020, falling oil prices, consolidation in the industry and subdued domestic consumption may have a negative impact on the sector, at least in the medium term.

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O&G industry faces bleak 2016

January 22, 2016

Nuclear, Nuclear.

Dateline 2015-12-18, Borneo Post:

The oil and gas industry has been sluggish in 2015 and prevailing low oil prices will continue to cast a bleak outlook in the medium-term.

From the peak of US$112 per barrel reached in June last year, Brent, the global benchmark, almost halved its price, plunging to US$61.31 in June this year.

It has been steadily falling to below US$50 per barrel since August before dropping to US$36.33 on Dec 14, slightly above the low of US$36.20 seen during the 2008 financial crisis.

The weak oil price trend is caused by the oil supply glut following the booming shale industry in the United States while the Organisation of the Petroleum Exporting Countries (OPEC) refused to cap its production, estimated at about 31 million barrels per day (bpd).

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Piped gas price in Peninsular Malaysia still sold below market price

January 19, 2016

Dateline 2015-12-14, The Star:

The price of piped gas in Peninsular Malaysia, which will be increased by RM1.50 per million metric British thermal units (mmBtu) for January-July 2016, is still sold below the market price, said Tenaga Nasional Bhd (TNB) chairman Tan Sri Leo Moggie.

However, under an agreement between TNB and Petroliam Nasional Bhd (Petronas), gas is supplied at RM15.20 per mmBtu for the first 1,000 million standard cu ft per day (mmscfd) compared with the liquefied natural gas (LNG) market price of RM46.041 quoted by Petronas for the period from October to December 2014.

He said under the Government’s subsidy rationalisation programme, the piped gas price would be revised gradually every six months until it reached the market price.

“However, at the moment it is still subsidised (by the government),” he told a press conference after TNB’s AGM in Kuala Lumpur on Monday.

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Report: Petronas set to gain ‘very little’ from TPP

January 10, 2016

Dateline 2015-12-03, The Malay Mail:

National oil giant Petronas will extract only marginal benefits from the Trans-Pacific Partnership (TPP) should Malaysia sign on, said a report by consultancy firm PricewaterhouseCooper (PwC) released today.

PwC noted that Petronas mostly exports to countries that are not part of the free-trade deal, adding that there are currently no or close to zero taxes imposed on its products that are sold to TPP member countries.

“The potential gains to Petronas from lower trade barriers are expected to be minimal. 74 per cent of Petronas’ exports are to non-TPP countries.

“In addition, a significant portion of Petronas’ export to the TPP countries already incur zero tariffs. For example, 60 per cent of Petronas’ export of liquefied natural gas (LNG) are destined to Japan at zero tariffs,” it said in its cost-benefit analysis of Malaysia’s signing of the TPP.

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Is it time to buy oil and gas stocks?

October 16, 2015

Nah, wait till 2H2016.

Dateline 2015-09-14, The Star:

IT is often regarded that the best time to accumulate a stock is when nobody is looking at it. Would that hold true for oil and gas [O&G] stocks whose prices have been beaten down in the wake of the collapse of oil prices?

“Yes and no, perhaps one can start looking at certain O&G companies that are not so directly impacted by the oil price and those that are in the brownfield segment,’’ said a senior analyst.

The analyst added that earnings for KNM and Dialog were more tied to jobs related to the massive Refinery and Petrochemical Integrated Development (Rapid) project by Petronas at Pengerang, Johor.

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Malaysia’s Petronas lifts Q2 output, margins, but foresees rocky ride

September 20, 2015

Dateline 2015-08-17, Platts:

Malaysia’s state-owned Petronas posted stronger refining margins in the second quarter and saw a near 3.5% growth in crude, condensate and natural gas production, but warned of tougher times ahead as it sees little scope of oil prices recovering in the second half of the year.

Petronas CEO Wan Zulkiflee Wan Ariffin said the acquisition of a 47% stake in Malaysian Refining Company late last year helped the company to boost its refining margins to “double digits” in the quarter that ended on June 30, from about $8/b in the previous quarter.

“As a result of the increased capacity through this acquisition, we could post stronger refining margins,” Wan Zulkiflee told reporters while announcing the company’s Q2 results in Kuala Lumpur.

“But there is a confluence of events that is not supporting high oil prices,” he said. “There is a chronic oversupply situation. Therefore, we expect oil prices will remain depressed for the rest of the year.”

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IEM Shout Out – Visit to Jutasama Sdn. Bhd.

March 19, 2015

This is a shout out for the IEM. My technical division will be hosting a trip to Jutasama (I first read it as Jutamas :)) Sdn. Bhd. on the 27th March, 2015. You will be anointed with 2.5 CPD / PDP hours.

Just note that is a Friday.

Jutasama Sdn. Bhd. (Jutasama) is engaged in the design, fabrication, installation and commissioning of special tanks, pressure vessels, piping and specialised processing equipment required by the chemical industry, food processing plants and other engineering undertakings. The company is capable of fabricating products in accordance to major international codes or specifications in carbon steel, stainless steel, alloy and clad materials.

..

Register here, and get the form here.  Flyers for the above and other events may be obtained here.

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IEM Shout Out – Visit to Jutasama Sdn. Bhd.

March 12, 2015

This is a shout out for the IEM. My technical division will be hosting a trip to Jutasama (I first read it as Jutamas :)) Sdn. Bhd. on the 27th March, 2015. You will be anointed with 2.5 CPD / PDP hours.

Just note that is a Friday.

Jutasama Sdn. Bhd. (Jutasama) is engaged in the design, fabrication, installation and commissioning of special tanks, pressure vessels, piping and specialised processing equipment required by the chemical industry, food processing plants and other engineering undertakings. The company is capable of fabricating products in accordance to major international codes or specifications in carbon steel, stainless steel, alloy and clad materials.

..

Register here, and get the form here.  Flyers for the above and other events may be obtained here.

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Buying opportunity in M’sian O&G sector

January 13, 2015

Anyone have USD3M they would loan to me riba-free?

Dateline 2014-11-03, The Malaysian Reserve:

Crude oil prices have fallen by about 25% since mid-June to a four-year low. Brent crude futures, which is the leading global price benchmark for oil, dropped below $86 per barrel whereas US West Texas Intermediate (WTI) futures dropped as low as $79.44, the lowest since June 2012.

The negative spillover implications of a sustained period of lower oil prices are detrimental to the whole industry, and could lead to lower corporate earnings, reduced production and loss of jobs.

With oil prices hitting multi-year lows, the oil and gas sector seems to be looking bleaker by the day.

In Malaysia, national oil company Petroliam Nasional Bhd (PETRONAS) is the sole rights owner of all oil revenues.

If Petronas reduces production, it will affect supporting industries such as services provider Sapura Kencana Petroleum Bhd and marine engineering firms like Coastal Contracts Bhd.

Analysts have started to factor in the lower oil prices and have cut earnings forecasts for Malaysian oil and gas related companies.

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Marketing Rounds – Surabaya

November 19, 2014

Some of the city sites. Wasn’t there on O&G business, though.

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