SapuraKencana Petroleum Bhd’s (SapuraKencana) wholly-owned subsidiaries have secured contracts and extensions with a combined value of approximately US$117 million (RM503 million).
SapuraKencana said the contracts would have no effect on the issued and paid-up share capital of the Company and are expected to contribute positively towards the earnings of SapuraKencana Group, principally for the financial year ending Jan 31, 2016 and, for contracts that extend beyond Jan 31, 2016, the financial period thereafter during their respective contract periods.
The integrated oil and gas services and solutions provider’s unit, SapuraKencana HL Sdn Bhd, has been awarded a contract for the Provision of Hook Up & Commissioning Works for KNPG-B Phase II, Kinabalu Non Associated Gas (NAG) Development Project by THHE Fabricators Sdn Bhd, a filing to the Bursa Malaysia showed.
This involves the provision of supervision, manpower, equipment and marine spread to carry out the hook up and commissioning of a Compression System module and High Pressure High Temperature (HPHT) facilities on the KNPG-B Central Processing Platform, it added.
“The contract is for a period of approximately eight months and works are expected to commence in the first quarter of 2016,” SapuraKencana added.
Meanwhile, another subsidiary SapuraKencana Technology Sdn Bhd (formerly known as Sapura Energy Sdn Bhd) has been awarded a contract by Hess Exploration & Production Malaysia B.V. for the provision of Engineering, Procurement and Construction of the Subsea Isolation Valve (SSIV) Systems at Block PM302, North Malay Basin.
“The scope of work under the contract includes the complete responsibility for carrying out and completing the work for SSIV Skids, Subsea Umbilical and Flying Lead, Hydraulic Power Unit (HPU), Topside Umbilical Termination Unit (TUTU), Umbilical Termination Assembly (UTA) and the supporting details,” it added.
SapuraKencana said the contract is for a period of approximately 18 months. It has commenced and is expected to complete around the first quarter of 2017.
In the drilling segment, SapuraKencana Drilling Tioman Sdn Bhd has been awarded a contract from Sarawak Shell Berhad (SSB)/ Sabah Shell Petroleum Co. Ltd (SSPC) for the provision of its Semi Tender Assist Drilling Rig “SKD Esperanza”. “The contract is for the nominal term of 18 months, with options to extend for up to a further 18 months,” it added.
On the tender assist drilling rig SKD T20 (SKD T20) awarded to SapuraKencana Drilling Holdings Ltd on May 15, 2014, SapuraKencana said the contract was now expected to be completed in June of 2016, adding to the original contract term.
“Additionally, there is the option to extend the contract by a 5 additional wells, which if exercised, will keep the SKD T20 on contract to the final quarter of 2016,” it added.
SapuraKencana said the risk factors affecting the contracts include execution risks, such as availability of skilled manpower and materials, changes in pricing, weather conditions, and/or political, economic and regulatory conditions. Notwithstanding, the Company has established a successful track record undertaking similar projects, it added.