Sapura discusses potential partnership in the drilling segment

KUALA LUMPUR (November 29): Sapura Energy Bhd, which recently entered into a joint venture for its profitable segment of exploration and production, is in talks with several potential partners for its drilling segment.

The President and CEO, Tan Sri Shahril Shamsuddin, confirmed that at least one company had already approached the integrated oil and gas group so that it participated in its drilling activities.

"In fact, it's pretty similar [to Sapura Energy’s recent tie up with Austrian OMV Aktiengesellschaft (OMV AG)] – This is the other company that is looking for us, "Shahril told reporters after an extraordinary general meeting of the group.

"But the price must be correct," he added, adding that Sapura Energy's condition was that the partner could introduce the group into new markets and allow access to new equipment at a competitive price. in the future.

Drilling is one of Sapura Energy's three core businesses, alongside exploration and production, as well as engineering and construction.

The partnership sought by Sapura Energy can be related to its partnership with OMV AG, which was concluded on 11 November. At the time, Sapura Energy sold to OMV 50% of its E & P unit, its only profitable segment at present at OMV. worth up to $ 975 million.

Sapura Energy currently has 16 platforms, including eight semi-tender platforms and eight auction support platforms.

In the context of the sectoral slowdown in recent years, the group has suffered massive writedowns of its drilling assets, including RM 2.1 billion for the fourth quarter ended January 31, 2018.

The asset utilization rate – described as "relatively young" by Shahril and with an average remaining life of 15 to 20 years – is currently 35%.

Shahril said, "This is our core business, so our Sapura Energy engineering and construction sector will also accept a new partnership or divestment. [plan to do so]. "

Sapura Energy's shares rose half a sen, or 1.45%, to 35 seniles, with 11.27 million shares traded, giving it a market capitalization of RM 2.27 billion. .