JOHOR BARU: Yinson Holdings Bhd expects the declining in prices of crude oil in the global to be a temporary setback.
Group
chief executive chairman Lim Han Weng said demand for floating
production, storage and offloading (FPSO) units would always be there
although major petroleum companies would put their investment plans on
hold.
FPSO units are floating production
centres, which are used to receive and process raw oil from a nearby
drilling platform. The oil is stored in the vessel and then offloaded
onto a tanker or through a pipeline.
“The
oil and gas (O&G) sector is likely to see zero investment within
the next one to two years as oil producers are closely watching the
trend in global crude oil prices,’’ he told StarBiz after the company’s EGM.
At the EGM, shareholders approved the
proposed divestment by the company of its non-oil and gas subsidiaries
to Liannex Labuan Ltd for RM168mil cash.
Han
Weng said major oil producing countries would in the next one to two
years, review their exploration activities by making some adjustments
and changes favouring them.
He said if
Saudi Arabia and Russia – the two bigger crude oil producers in the
country were to cut their production capacity by one million barrels
daily each, it would help to push back the prices of oil to high time
high.
“Right now, the global oil market
is flooded by a surplus of two million barrels per day which is the
reason why the prices of crude oil are moving down south,’’ he said.
Han
Weng said once the petroleum companies started to invest again after a
one or two year hiatus from now, the global O&G sector could expect
demand for the support-related services to go up.
“The
market is big enough for six active players as the FPSO segment is a
niche market, clients (petroleum companies) will only entertain
incredible players,’’ he added.
Yinson is
one of the six active players in the world – others are one each from
Malaysia, Japan, the Netherlands, Norway and the United States.
Executive
director and group chief executive officer Lim Chern Yuan said the
company currently had US$5.60bil in its order book for the FPSO units
which could keep it busy for the next 20 years.
He
said more than 50% of the FPSO units in the order book were for clients
to undertake exploration activities in Gabon, Ghana and Nigeria. “The
African continent offers good growth prospects for us in the long term
as only about 30% to 40% of the continent has electricity supply,’’ said
Chern Yuan.
He said the African
countries would be investing billions of dollars in years to come to
build natural gas-powered stations to provide electricity for the
population.
Chern Yuan said with more
money to be pumped in by the governments in the continent for the
gas-powered stations, it would boost gas exploration activities there.
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