Local oil and gas companies like Sapura Energy Bhd will have the opportunity to secure more contracts moving forward, underpinned by Petronas 2019–2021 Activity Outlook (PAO), which will project gradual improvements in the utilization of rigs.

Petronas raised its capital expenditure spending by 9% to RM29bil in the first nine months of 2019. The upward momentum is expected to continue in 2020, thus benefitting local upstream oil and gas players like Sapura Energy.

Sapura Energy’s year-to-date order book currently stands at RM15.1bil.

Over the longer term, offshore projects in Brazil, Mexico, the Middle East and West Africa are poised to gain traction with Sapura Energy being selected for Saudi Aramco’s Long Term Agreement program.

This would allow the company to bid for the kingdom’s massive offshore projects that could reach US$150bil over the next 10 years.

Analysts reckoned the current valuations on oil and gas companies reflect the high expectations that local activity has improved due to rising asset utilization globally, thus supporting service providers’ improving results.

Source: Azlan Abu Bakar