Sapura Energy CEO: Delays are Inevitable

A. Ananthalakshmi
Thursday, April 30, 2020

Malaysia's largest oil and gas services company Sapura Energy said on Thursday it expects a delay in projects due to the historic rout in oil prices and as widespread coronavirus shutdowns hit demand.

"Delays are inevitable," Chief Executive Shahril Shamsuddin said in an earnings conference call, adding that it could take 18-24 months for the oil market to recover due to high inventory levels.

Sapura is aiming to lower operating costs by at least 500 million ringgit ($115.90 million) per year to adapt to the drop in demand and oil prices, Shahril said, adding that the company was budgeting for a long-term oil price of $40 to $45 per barrel.

Brent crude rose around 10% to $24.90 a barrel on Thursday, though not too far from a more-than-20-year low hit earlier this month.

Demand has been hit by movement and business curbs implemented to contain the spread of the coronavirus. The Organization of the Petroleum Exporting Countries (OPEC) and other major producers have announced output cuts.

On Wednesday, Sapura posted a loss from continuing operations of 4.23 billion ringgit ($979.62 million) for the fourth quarter ended January, wider than the 2.23 billion ringgit loss last year. Revenue slumped 25% to 1.11 billion ringgit.

The losses included impairment charges of 3.04 billion ringgit and a 438.8 million ringgit provision to account for project delays.

The Malaysian firm had announced salary cuts and job cuts earlier this week. The company is also looking to refinance loans by the end of the year, Shahril said.

($1 = 4.3140 ringgit) (Reporting by A. Ananthalakshmi, Editing by Sherry Jacob-Phillips)

Categories: Industry News Activity Asia Malaysia Oilfield Services

Related Stories

Chuditch Gas Field Up for Summer Drilling Ops as Sunda Reshapes Ownership Structure

Hanwha Drilling’s Tidal Action Drillship En Route to Petrobras’ Roncador Field

Sapura Energy Scoops Close to $9M for O&M Work off Malaysia

Borr Drilling Bags Three New Assignments for its Jack-Up Drilling Rigs

Shell Hires Noble’s Drillship for Work in Southeast Asia

Valeura Wraps Up Infill Drilling Campaign in Gulf of Thailand

Shell Predicts 60% Rise in LNG Demand by 2040 with Asia Leading the Way

Six New Gas Wells in Line for BP’s Shah Deniz Field in Caspian Sea

US Operator Finds Oil Offshore Vietnam

Saipem’s Castorone Vessel on Its Way to Türkiye’s Largest Gas Field

Current News

MODEC, Sumitomo Partner Up for Delivery of Gato do Mato FPSO

Chuditch Gas Field Up for Summer Drilling Ops as Sunda Reshapes Ownership Structure

EnQuest Bags Two Production Sharing Contracts off Indonesia

Hanwha Drilling’s Tidal Action Drillship En Route to Petrobras’ Roncador Field

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

MODEC Wins ExxonMobil Guyana’s Hammerhead FPSO Contract

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Indonesia Awards Oil and Gas Blocks to Boost Reserves

Sapura Energy Nets $22.6M in Offshore Support Vessel Contracts

CNOOC Puts Into Production New Oil Field in South China Sea

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com