The Malaysian offshore oil and gas industry continues to feel the pinch of smaller budgets from national oil company Petronas in particular, with the offshore supply vessel (OSV) players especially hard hit among the listed companies that have recently reported results.
Among the usual suspects such as Alam Maritim, Icon Offshore, Petra Energy and Perdana Petroleum, only Petra Energy was able to turn in higher revenue on higher utilisation rate for its support vessels. Notably Petra is among the larger players in the segment, with a services arm that has benefitted from work from Petronas exploration and production (E&P) arm Petronas Carigali, as well as a production and development business that is involved in several small field risk service contracts or brownfield projects offshore Malaysia.
A combination of these businesses helped Petra to a 39% rise in revenue to MYR463m ($118.5m) in 2017.
Meanwhile Alam Maritim, Icon Offshore and Perdana Petroleum all turned in lower revenue for the year, with the same refrain of lower utilisation rates coupled with weaker charter rates. Perdana Petroleum noted that fleet utilisation fell to 52% in 2017 from 58% the year before while on average charter rates were about 25% lower than in 2016.
Looking ahead to their prospects for the year, the differentiating factor among the different companies was their relationships with other support services companies as well as the degree to which they had diversified outside the domestic market.
Perdana Petroleum for example expected its utilisation rate to improve this year as a substantial number of its vessels will be set aside for work with its parent Dayang Enterprise, which has offshore maintenance and hook-up contracts with various oil majors who are seen to be ramping up activities.
Icon Offshore meanwhile said it would focus on securing new contracts and maximising utilisation rates through competitive tendering for domestic and regional contracts, as well as leveraging on its expanded presence in Brunei.
All however warned of continued volatility and uncertainty in the domestic market and advised caution, saying they would continue to conserve cash and cut costs while improving efficiency.