Global Offshore tipped to win Petronas deal

By Sharen Kaur
Published in NST, Jan 11 2010

New York-listed Global Industries, a US$3 billion (RM10 billion) oil company, is expected to get a contract worth RM350 million from Petroliam Nasional (Petronas) Bhd, breaking an area dominated by SapuraCrest Petroleum Bhd (8575) for the last five years.




Sources said the contract is to lay oil and gas pipelines between platforms in shallow waters across Malaysia, from March this year.



Business Times understands that the contract will be awarded to Global Industries' local subsidiary, Global Offshore Malaysia Sdn Bhd, sometime this month.



The duration is for three years up to 2012, with options for two further extensions of one year each. The value of US$100 million (RM338 million) is for works for the first year.

Global Offshore will use the derrick lay barge DLB 264, owned by its parent company, for the works.



It is also believed, Kencana Petroleum Bhd, controlled by Datuk Mokhzani Mahathir will get a share of the pie as it will take a stake in Global Offshore.



"Kencana will buy 45 per cent of the company and the vessel. They are ironing out the details with Global Offshore to strike a deal soon," industry sources said.



Industry estimate for a vessel of similar specification and age like the DLB 264 is around US$50 million (RM169 million).



This is one of five transportation and installation packages to be awarded by Petronas.



Last month, SapuraCrest's wholly-owned unit, TL Offshore Sdn Bhd, won three packages worth a combined RM1.5 billion.



TL Offshore was awarded a joint contract by 11 of Petronas' Production Sharing Contractors (PSCs) for the transportation and installation of offshore oil and gas facilities and structures for the PSCs, which include Shell Sarawak, Shell Sabah, Newfield, Murphy Oil, Nippon Oil, Talisman and ExxonMobil.



The duration for the SapuraCrest contract is similar to the one offered to Global Offshore.



"SapuraCrest has been dominating the market for five years. Its monopoly is broken with the entry of Global Offshore and Kencana Petroleum," the sources said.



The fifth package, which Petronas will award within the next two to three weeks, is expected to go to Master Offshore Sdn Bhd, a unit of Target Resources Sdn Bhd.



The contract is believed to be also worth around US$100 million and the scope of works will be similar to the one offered to Global Offshore.



The five packages attracted six bidders, including J Ray McDermott Inc-Bumi Armada Bhd, Sigurros Sdn Bhd-Sime Darby Bhd and PBJV Group Sdn Bhd.

-ENDS-