SAPURA ENERGY SECURES MORE CONTRACTS BY SHAHRIL SHAMSUDDIN

shahril shamsuddin

KUALA LUMPUR: Sapura Energy Bhd is cheery about coming back to the black in the financial year finishing January 31, 2020, fuelled by expanding order book, reduction in annual interest debt and higher oil and gas (O&G) production.

Its president and group CEO Tan Sri Shahril Shamsuddin said the organization could secure more contracts in the Middle East, India, South and Central America and in addition Africa in the following couple of weeks.

Sapura Energy’s order book at present stands at RM16 billion that will give profit permeability for the following three years.

“We are in a time of development with right procedures to build our order book. We additionally require working cash-flow to execute huge order book,” Shahril told reporter after the signing ceremony between Sapura Energy and OMV Aktiengesellschaft (OMV AG) here today.

Shahril said it was fundamental for an O&G organization to have a demonstrated reputation (experience and skill) while generating profit and upgrading its capacity to mitigate a risk that is predominant in the business.

Sapura Energy is relied upon to close a joint-venture (JV) deal the Austrian incorporated O&G organization OMV AG by January 31 one year from now. The last is purchasing a 50 percent stake in Sapura Energy’s subsidiary, Sapura Upstream Sdn Bhd for US$975 million.

The underlying continues incorporate US$540 million for 50 percent shares membership in Sapura Upstream from OMV AG and US$350 million for the between organization debt payment.

These are immediate proceeds, expected to be raised when the deal is closed on January 31 one year from now.

Additionally, the parties agreed to get up to US$85 million dependent on events basically connected to the asset volume in Block 30 (investigation resource) in Mexico.

Of the aggregate continues, Shahril said RM720 million will be utilized for Sapura Energy’s debt repayment and RM160 million for its future working capital.

He said the JV would likewise partially add to the organization’s profitability.

When the deal is completed, Sapura OMV Upstream will be set up as the JV organization that will be held 50:50 between Sapura Energy and OMV AG.

“We trust this organization will make economic development for the business, acknowledging cooperative energy from the two sides to accomplish our vision of making the biggest regional independent O&G Company,” he said.

With this JV, Shahril said Sapura Energy was relied upon to considerably pay off its debt to around 0.6 times from the current 1.6 times from RM17 billion to RM10 billion, in the wake of including continues of the RM4 billion rights issue and US$720 million.

“We can have a cost-sharing of over RM300 million in interest debt every year,” he said.

OMV board member upstream and Chairman Johann Pleininger said the procurement would add attractive reserve volumes to the organization’s portfolio and significant near-term increase in production.

“Asia Pacific is an appealing developing business sector. Malaysia will speak to OMV’s platform for further regional development,” he included.

Pleininger said OMV AG would gain by the developing business sector in the area, referring to that O&G request was relied upon to increment by 20 percent until 2030 in Malaysia.

“Sapura Energy is our accomplice of a decision, contrasted with other independent O&G organizations in the region.

“We found that Sapura Energy has the best permeability of cash flow and quality of the asset,” he said.

The partnership would likewise permit OMV AG to help its upstream system towards establishing Australasia as another core region.

The JV administrative control will be given to Sapura Energy for the administrator and CEO positions, while CFO will be under OMV.

Shahril said Sapura Energy’s O&G production is probably going to be tripled (30,000 for each barrel) in the following three years from the current of 10,000 barrel of oil comparable.

The JV also permits Sapura Energy to build up its human capital and innovative ability in O&G part.

Source:https://www.nst.com.my/business/2018/11/429693/sapura-energy-expects-be-profitable-fy20

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