Thursday, February 23, 2012

A good year for oil, gas industry 2012

KUALA LUMPUR:   The outlook of the world's oil and gas industry is expected to remain buoyant this year, said Acteon Group analyst Will Rowley.

"Its (2012) going to be a good year. If you look at financial results of major operators and contractors, 2011 was better than 2010.

"So, there is no reason this year should not be any better than 2011. There is no shortage of works, only margin to improve and a little bit of cost," said on the sidelines of the three-day Offshore Asia conference and exhibition 2012 here yesterday.

For instance, he cited in the last few days, Schlumberger and Halliburton announced more than 40 per cent increase in their profitability year-on-year.

"There was also increased profitability across major listed companies and operators, and in terms of cash in hand, it has gone up."


In his presentation, Rowley said offshore oil is on an upward trend again. "All activities are increasing, supported by cash-rich operators. There are opportunities in new frontier areas through innovation of products, services and working method.

"Exploration is increasing but geographically diverse. Deepwater continues to dominate short-term expenditure and the floating liquefied natural gas/liquefied natural gas is fast becoming a growing niche market."

Moving forward, Rowley said the industry's capital expenditure is expected be close to a record level of about US$500 billion (RM1.52 trillion) this year.

"There are also technical challenges that would cause more money to be spent," he added.

He cited that listed exploration and production companies have in excess of US$200 billion (RM606 billion) in cash, while listed oilfield services firms have in excess of US$48 billion (RM145.44 billion) of cash.

On the local front, Rowley said Malaysia is an exciting country for companies like Acteon to work in as there is a lot of potentials in the domestic oil and gas sector.

Meanwhile, Petronas development and production senior general manager for petroleum engineering Chen Kah Seong said the national oil company is intensifying its domestic exploration as well as looking at high-value assets overseas as part of its strategies to sustain oil and gas reserves.

He said information pertaining to Malaysia's oil and gas reserves life span can be obtained when Petronas announced its financial year results next month.

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