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More investments from industry players if oil price stays around US$70 — Sapura Energy CEO

More investments from industry players if oil price stays around US$70 — Sapura Energy CEO

14 Dec 2021

The oil and gas sector will witness more investments and higher capital expenditure from industry players if crude oil prices stay around US$70 (about RM296.52) per barrel, said Sapura Energy Bhd chief executive officer (CEO) Datuk Mohd Anuar Taib.

Speaking at a virtual media briefing on Tuesday (Dec 14), Anuar said the oil and gas industry had experienced less investment from the players since 2015, with the dire situation further exacerbated by Covid-19.

“If you look at some of the global oil and gas major players, they have started to talk about shifting capital expenditure from oil and gas to renewable energy.

“Against this backdrop, the level of investment in the oil and gas business could be less if we compare it with before 2015 in the same crude oil price range,” he said. 

On the renewable energy front, Anuar shared that Sapura Energy had been actively bidding for other opportunities in the space, which are not only limited to installation of the foundation parts.

“We did our first foray by becoming a contractor for renewable energy in Taiwan. From the technical perspective, we have learnt a lot from this Taiwan project in terms of how it works and understand the uncertainties and risks,” he said. 

On Monday, Sapura Energy reported that its net profit narrowed by 56% to RM669.34 million for the third quarter ended Oct 31, 2021, from RM1.52 billion for the immediate preceding quarter, which saw higher project costs recognised for certain projects and a provision for foreseeable losses.

Revenue jumped 94% to RM1.46 billion from RM747.1 million quarter-on-quarter on higher completion of projects.

For the cumulative nine months ended Oct 31, 2021, the group posted a net loss of RM2.28 billion, compared to a net profit of RM55.16 million for the same period last year, due to a provision for foreseeable losses, higher project costs, a lower share of profit from associates and joint ventures, and an impairment charge arising from assets held for sale.

Cumulative revenue fell 6% to RM3.67 billion from RM3.9 billion previously.

Sapura Energy’s share price was unchanged at five sen in afternoon trading, valuing the group at RM798.95 million, with 36.6 million shares traded so far.

Source: The Edge Markets