Singapore’s Swiber Holdings (SWBR.SI) is targeting an offshore services contract worth US$80-US$100 million ($96-$120 million) from a major oil company based in Brunei every year till 2016, its chief executive officer said.
“Brunei has been doing offshore oil and gas production for quite a number of years, so there’s a certain life span of all these structures in the field,” CEO Francis Wong told Reuters in an interview. He did not disclose the name of the oil major.
“The pressure in the reservoir will reduce, so as a result of that they need to upgrade the equipment. That naturally will give us work,” Wong added.
Brunei Darussalam is known for its vast reserves of petroleum and gas, which have fuelled the nation’s economy for almost eight decades.
Royal Dutch Shell (RDSa.L) has a joint venture with the government of Brunei for oil/gas exploration and production.
Wong also expects offshore construction activities to pick up in the next 12-18 months, driven by Asia and the Middle East, despite the weakening economic outlook in the U.S. and Europe.
Up to 2016, the company has identified 30 potential projects worth US$45 billion in the Middle East, 30 projects valued at US$6.2 billion in South Asia, as well as 88 projects with a total value of around US$4.3 billion in Southeast Asia.
These will be a combination of newly formed and existing sites. Wong said he hopes to achieve gross profit margin of 15-20% across the markets that Swiber operates in.
“Based on the bidding activities happening now in the industry, I would say that compared to 2009, 2010, it’s quite a different scenario,” Wong said. “Offshore construction activities will pick up 12-18 months from now.”
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