Posts tagged petroleum
Indonesia is considering tax holidays for major foreign direct investors, targeting new and existing businesses in an attempt to bump the country’s FDI up to a total Rp240 trillion (US$28.2 billion) by the end of 2011.
Finance Minister Agus Martowardojo said details of the plan were still being discussed, but would probably feature 5-10 year tax breaks for investors in the base metals, telecommunications equipment, oil refinery, petrochemicals, machinery and renewable energy industries.
The new plan would also cover businesses which had been in operation less than a year. Projects such as a $6 billion joint venture by South Korea’s POSCO, a $4.5 billion petrochemical complex by Honam Petrochemical Corp (also of South Korea) and a $8-9 billion oil refinery from Kuwait Petroleum Corp were said to be waiting for an announcement on foreign investor tax breaks before going ahead.
Foreign direct investment (FDI) into Indonesia in Q2 is already up 21% on the same period last year, thanks mainly to the mining sector. The government is also mulling plans to give tax holidays to smaller investors employing 100-300 people, determined to take Indonesia’s economy into the global Top 10 by 2025 and making much-needed improvements to the country’s infrastructure.
Another Malaysian petroeum giant is set to emerge, with SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd announcing a RM11.9 billion (US$3.9 billion) merger plan to form Malaysia’s largest oilfields services provider by assets. The move is bound to please the government, coming just half a year after Prime Minister Najib Razak revealed incentives to explore less profitable oilfields, and the two companies jointly received a contract from government-linked Petronas to develop an eastern field in partnership with Petrofac Ltd.
The merger was orchestrated by Integral Key Sdn, a company set up especially to handle the merger by a unit of Malayan Banking Bhd (Maybank). The company made a bid of RM4.60 per share in stock and cash for SapuraCrest and the equivalent of RM3 per share for Kencana. The merged company would have around RM6 billion ($1.98 billion) in assets and would grow from there thanks to an increased ability to handle larger and more complex projects.
Integral’s offer, which is valid until 15 August 2011, is a 2.4% premium on SapuraCrest’s 8 July share price of RM4.49 and a 7.1% premium on Kencana’s RM2.80. SapuraCrest’s share price rose 0.7% to RM4.92 on the news and Kencana’s jumped 3.9% to RM2.91. Bloomberg reports the new entity would have a market cap of RM11.1 billion ($3.66 billion) based on current prices, making it Malaysia’s second largest company of its type by market cap (after Malaysia Marine and Heavy Engineering Bhd) but the largest by assets.
Analysts say the two companies are a good fit. SapuraCrest operates drilling rigs, installing pipelines and developing oil and gas fields, while Kencana is in the engineering and fabrication business. The merger is expected to prompt other smaller players into tie-ups, and the government’s offer of development investives still stands.
source & article: Bloomberg
Malaysia is about to set up a central coordination and promotion center called the Malaysian Petroleum Resource Corporation, designed to make it easier for foreign companies in the oil field services & equipment (OFSE) industry to invest in Malaysia.
It’s hoped that by attracting more foreign OFSE producers to Malaysia with its cost competitive and more business-friendly environment, the country can build its expertise in the area. Sights are set on some 10-20 prominent companies, with the hope they could base 10% of their global operations in Malaysia. Malaysian companies in deepwater exploration would also benefit from foreign technology and skills.
Malaysian Deputy Prime Minister Muhyiddin Yassin announced the new one-stop center at the 13th Asian Oil, Gas and Petrochemical Engineering Exhibition (OGA 2011) in Kuala Lumpur this week.
OFSE companies would benefit from Malaysia’s proximity to growing markets in the region, which is projected to consume about 420,000 barrels of oil a day by 2015 and should grow opportunities in the midstream logistics market for oil and oil product storage. The OFSE industry on the whole has grown 25% in the past few years, and is reportedly worth RM800 billion (US$264.7 billion) globally.
source & article: MIDA
Regional Malaysian oil and gas provider SapuraCrest Petroleum Bhd has inked a deal with Petrovietnam Technical Services Corporation (PTSC) to share staff expertise and help cement its five-year old relationship with Vietnam.
The deal will involve scholarships for selected PTSC personnel at Malaysia’s Asia Pacific University College in Technology Park, Bukit Jalil, and enable both companies to develop core oil and gas businesses such as ocean construction and seismic surveying. Increased knowledge-sharing and cooperation will also enable SapuraCrest to meet Vietnamese market requirements for foreign-owned companies.
SapuraCrest also has a presence in most other Southeast Asian countries, as well as India, Russia, Japan, Australia and Africa.
source & article: Business Times