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Dismantling facilities or bringing in 6 billion contract oil and gas stocks to welcome "retirement tide" business opportunities
Nanyang Tue, Jul 02, 2019 - 1 week ago

KUALA LUMPUR (April 2): Analysts pointed out that starting next year, local and regional oil and gas fields will usher in a wave of “retirement”, that is, old oil wells, platforms or facilities need to be scrapped or dismantled, which may bring value up to 60. Billion ring business opportunities.

Among them, the main winners will be Uzma (UZMA, 7250, main board energy stocks), Velesto energy (VELESTO, 5243, main board energy stocks), Shabra Energy (SAPNRG, 5218, main board energy stocks) and Dayan Enterprises ( DAYANG, 5141, main board energy stocks).

In the report, Dahua Jixian Securities analyst pointed out that in the report of PETRONAS's "2019 to 2021 Activity Outlook", the decommissioning project is a rapidly developing sub-field and a commitment of oil and gas companies to control environmental pollution. One.

Of the 300 platforms in China, 11% or more have been in operation for more than 40 years; more than 200 wells should be scrapped.

Petronas needs to scrap 50 oil wells this year, and will scrap 40 and 60 oil wells in the next two years.
Petronas needs to scrap 50 oil wells this year, and will scrap 40 and 60 oil wells in the next two years.
Petronas scrapped 50 oil wells this year

Among them, Petronas needs to scrap 50 oil wells this year, and will scrap 40 and 60 oil wells in the next two years. In the scrapping process, hydraulic workover rigs, offshore support vessels and other ancillary services are required. It is believed that Uzma and Velesto energy can stand out.

Of the 50 wells that need to be scrapped this year, Uzma already has 36 hydraulic well workover contracts for oil wells; Velesto Energy also has at least 7 to 8 well contract schedules this year.

Other concessions include Dayang and Bida Energy, which provide connectivity and start-up (HUC) services (PENERGY, 5133, main board energy stocks), and large offshore support ship operator Icon (ICON, 5255, main board energy stocks) ) and Bodana (PERDANA, 7108, main board energy stocks), and wire rope service provider Dillon (DELEUM, 5132, main board energy stocks).

In terms of equipment disassembly, Petronas plans to require equipment for the next three years, including floating storage loading and unloading vessels, underwater test wellheads, light wellhead platforms, operating platforms, and large central processing platforms.

“To comply with these contracts, operators must have dock equipment, underwater cutting services, and shipping and weightlifting services.”

Among the oil and gas stocks tracked by the bank, Shabra Energy is fully qualified. Other offshore testers such as Dayan Enterprise and Bida Energy are also exploring the business opportunities of the decommissioning projects.

According to Dayan’s estimates, local and regional decommissioning demand may result in a contract of approximately RM6 billion. However, there is currently no formal tendering activity.

Regional decommissioning demand is huge

Analysts pointed out that even though Petronas's pace of implementation of decommissioning projects is slow, there is still a huge demand for decommissioning projects in the region.

According to a report by Wood Mackenzie, an international market consultancy, last year's report, there were 35,000 wells, 2,600 platforms, and more than 55,000 kilometers of pipelines in the Asia-Pacific region. The cost of decommissioning was more than $100 million (RM 414 million).

The agency predicts that each simple well-removal project will cost between RM2 million and RM4 million; as for large-scale demolition projects, the total value may be as high as RM80 million to RM100 million.

Opportunity to share a slice of the regional market, including Dai Le Group (DIALOG, 7277, main board energy stocks), Shabra Energy and Yunsheng Holdings (YINSON, 7293, main board energy stocks).

But analysts also stressed that the demand for decommissioning in the Asia-Pacific region is still in its infancy, meaning that all operators and regulators need time to prepare and learn to meet this "retirement tide", and may also suffer some losses due to mistakes.

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Stock: [VS]: V.S INDUSTRY BHD

2019-07-11 12:43 | Report Abuse

Limit up?

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Stock: [HIBISCS]: HIBISCUS PETROLEUM BHD

2019-07-10 22:42 | Report Abuse

Brent price rise !!

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