BIMBSec - Oil and Gas News Flash - 20120423
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BIMB SECURITIES RESEARCH MARKET INSIGHT Monday, 23 April, 2012 PP16795/03/2013(031743) | 1 Oil & Gas News Flash Overweight Flows As Strong As Expected Chiong Tong Chai [email protected] 03-26918887 ext 175 1. It was reported that Exxon is looking to award the conceptual studies contracts within weeks for its Guntong Enhanced Oil Recovery (EOR) exercise. The contact involves maturing of the concept for a Water-Alternate-Gas (WAG) EOR and will also include brownfield studies on the modification and tie-in to existing production facilities. The proposed development requires a new gas compression or utilities platform with processing capacity for 190m cubic feet per day and will be bridge-linked to the existing Guntong A central processing platform as well as modification and additional facilities at the Guntong A, B and C wellhead platforms. The WAG EOR development is targeted for start-up by 1Q2017. Comments. This development is a follow-up from Exxon’s USD2.1bn EOR investment commitment signed with Petronas last year for 7 fields ie. Tapis, Seligi, Guntong, Semangkok, Irong Barat, Tabu and Palas. MMHE (Sell TP: RM4.76) had in November 2011 secured the turnkey contract for two offshore platforms worth RM1.2bn for Tapis’ WAG EOR and the facilities are expected to achieve production start-up in 2013. We are encouraged by this latest development and expect to see subsequent roll-out for the other 5 fields in a foreseeable future. Price tag for the proposed new gas platform is likely to be lower than the one bagged by MMHE as it has a smaller handling capacity than the 360m cubic feet per day for Tapis’ platform. With Petronas reportedly targeting at least 5 of the 6 fields i.e Tapis, Guntong, Dulang, Bokor, Samarang and Temana fields WAG EOR to be on stream between 2013-15, we are looking at strong activities within the fabrication segment as all these developments require new central processing platforms equipped with either or both gas compression and water injection capabilities. 2. On the development of the world ’s first full field vessel based chemical EOR for Petronas Carigali’s Angsi field which is undergoing a pre-Q exercise, it was reported that the contract has garnered initial interest from MISC, Bumi Armada, M3nergy and surprisingly Kencana was reportedly interested as well while Delcom which is bidding for the similar project for Shell’s St. Joseph field was not named as one of the potential contenders. There is also a possibility that MMC Oil & Gas Engineering, Water Standard and Uzma which completed the basic engineering studies for the project would participate either jointly or separately. Local players are not alone as the project is open for international players. On table is a firm 5-year contract to supply a vessel to support the chemical EOR and will also include FEED as well as EPCC components. Original scheduled start-up is by 3Q2013, suggesting the vessel is likely to be a converted unit than a new built. Comments. This development continues to underpin our view on strong domestic demand for floater solutions. Concurrently, similar tender for Shell’s St. Joseph field is still running though according to Upstream it may be re-tendered due to commercial consideration, while we are not able to confirm this development with market sources, we highlighted the contract was supposedly to be awarded in April/May with Bumi Armada (Neutral TP: RM4.65) and Delcom in the race. Whoever the winners for the both contracts, we reckon it will open more doors for the winner for future involvement as Petronas was reportedly to be interested to deploy the same EOR method to oth er fields.
description
1. It was reported that Exxon is looking to award the conceptual studies contracts within weeks for its Guntong Enhanced Oil Recovery (EOR) exercise. The contact involves maturing of the concept for a Water-Alternate-Gas (WAG) EOR and will also include brownfield studies on the modification and tie-in to existing production facilities. The proposed development requires a new gas compression or utilities platform with processing capacity for 190m cubic feet per day and will be bridge-linked to the existing Guntong A central processing platform as well as modification and additional facilities at the Guntong A, B and C wellhead platforms. The WAG EOR development is targeted for start-up by 1Q2017.2. On the development of the world’s first full field vessel based chemical EOR for Petronas Carigali’s Angsi field which is undergoing a pre-Q exercise, it was reported that the contract has garnered initial interest from MISC, Bumi Armada, M3nergy and surprisingly Kencana was reportedly interested as well while Delcom which is bidding for the similar project for Shell’s St. Joseph field was not named as one of the potential contenders. There is also a possibility that MMC Oil & Gas Engineering, Water Standard and Uzma which completed the basic engineering studies for the project would participate either jointly or separately. Local players are not alone as the project is open for international players. On table is a firm 5-year contract to supply a vessel to support the chemical EOR and will also include FEED as well as EPCC components. Original scheduled start-up is by 3Q2013, suggesting the vessel is likely to be a converted unit than a new built.
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BIMB SECURITIES RESEARCH
MARKET INSIGHTMonday, 23 April, 2012
PP16795/03/2013(031743)
| 1
Oil & Gas News Flash Overweight Flows As Strong As Expected
Chiong Tong Chai
03-26918887 ext 175
1. It was reported that Exxon is looking to award the conceptual studies contracts
within weeks for its Guntong Enhanced Oil Recovery (EOR) exercise. The contact
involves maturing of the concept for a Water-Alternate-Gas (WAG) EOR and will
also include brownfield studies on the modification and tie-in to existing
production facilities. The proposed development requires a new gas compression
or utilities platform with processing capacity for 190m cubic feet per day and will
be bridge-linked to the existing Guntong A central processing platform as well as
modification and additional facilities at the Guntong A, B and C wellhead
platforms. The WAG EOR development is targeted for start-up by 1Q2017.
Comments. This development is a follow-up from Exxon’s USD2.1bn EOR
investment commitment signed with Petronas last year for 7 fields ie. Tapis, Seligi,
Guntong, Semangkok, Irong Barat, Tabu and Palas. MMHE (Sell TP: RM4.76) had in
November 2011 secured the turnkey contract for two offshore platforms worth
RM1.2bn for Tapis’ WAG EOR and the facilities are expected to achieve production
start-up in 2013. We are encouraged by this latest development and expect to see
subsequent roll-out for the other 5 fields in a foreseeable future. Price tag for the
proposed new gas platform is likely to be lower than the one bagged by MMHE as
it has a smaller handling capacity than the 360m cubic feet per day for Tapis’
platform. With Petronas reportedly targeting at least 5 of the 6 fields i.e Tapis,
Guntong, Dulang, Bokor, Samarang and Temana fields WAG EOR to be on stream
between 2013-15, we are looking at strong activities within the fabrication
segment as all these developments require new central processing platforms
equipped with either or both gas compression and water injection capabilities.
2. On the development of the world’s first full field vessel based chemical EOR for
Petronas Carigali’s Angsi field which is undergoing a pre -Q exercise, it was
reported that the contract has garnered initial interest from MISC, Bumi Armada,
M3nergy and surprisingly Kencana was reportedly interested as well while
Delcom which is bidding for the similar project for Shell’s St. Joseph field was not
named as one of the potential contenders. There is also a possibility that MMC
Oil & Gas Engineering, Water Standard and Uzma which completed the basic
engineering studies for the project would participate either jointly or separately.
Local players are not alone as the project is open for international players. On
table is a firm 5-year contract to supply a vessel to support the chemical EOR and
will also include FEED as well as EPCC components. Original scheduled start-up is
by 3Q2013, suggesting the vessel is likely to be a converted unit than a new built.
Comments. This development continues to underpin our view on strong domestic
demand for floater solutions. Concurrently, similar tender for Shell’s St. Joseph
field is still running though according to Upstream it may be re-tendered due to
commercial consideration, while we are not able to confirm this development with
market sources, we highlighted the contract was supposedly to be awarded in
April/May with Bumi Armada (Neutral TP: RM4.65) and Delcom in the race.
Whoever the winners for the both contracts, we reckon it will open more doors for
the winner for future involvement as Petronas was reportedly to be interested todeploy the same EOR method to other fields.
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On Uzma (Buy TP:RM2.70) which earlier raised RM16m through a private
placement, we are not surprised of their potential involvement as we highlighted
earlier that they are likely to bid for the supply of chemicals which could be worth
about RM500m. As for the status for their RM350m well testing contract from
Petronas secured early this year, first deployment is expected to commence this
month and activities should pick-up, considering Petronas’ aggressive domestic
exploration and development programmes. On its crown jewel, UzmaPres, weunderstand that subsequent 2 units are expected to be installed by 1H12 pending
for the readiness of the targeted platforms to receive the new installations.
Currently the company has already installed 5 units of the cash generating
machine.
Malaysia – O&G Blocks & Fields
Source: Petronas, Suruhanjaya Tenaga
Water-Alternate-Gas EOR (Onshore)
Source: Google Image
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